The Minnesota Senate recently passed a Paycheck Protection Program loan tax conformity bill intended to provide relief to small businesses by ensuring they are not penalized for keeping their employees on payroll through the COVID-19 pandemic. KAUS spoke with State District 27B Representative Patricia Mueller, a Republican from Austin who stated that in the House, a pair of bills dealing with PPP loan forgiveness and supplemental unemployment insurance benefits from the federal government have been folded into the House’s omnibus tax bill….
Last year the federal CARES Act established the PPP program for small businesses experiencing hardship and revenue losses resulting from the COVID-19 pandemic. Under the program, loans would be forgiven if they were utilized to fund qualified costs and 60% of the loan proceeds were used for payroll costs.
The federal government made it clear that forgiven PPP loans were not considered taxable income at the federal level, but they are at the state level according to Minnesota Law.