What States Are Taxing Federal PPP Loans?
As Connecting the Dots reported earlier this month, some state lawmakers have approved legislation that would tax small businesses that received the federal Paycheck Protection Program (PPP) loans—even though the loans were meant to help them survive the COVID-19 pandemic recession. The nonprofit, nonpartisan Tax Foundation is now tracking how each state will handle the tax treatment of PPP loans. Click here to view this resource.
As the Tax Foundation explained, “Denying the deduction for expenses covered by forgiven PPP loans has a tax effect very similar to treating forgiven PPP loans as taxable income: both methods of taxation increase taxable income beyond what it would have been had the business not taken out a PPP loan in the first place.”
As a reminder, MSCI has fought to ensure that businesses that took PPP loans are not hit with unexpected tax bills for taking the relief. Click here to read more about MSCI’s efforts to protect PPP recipients.