Assemblyman Paul Tittl of Manitowoc has voted to ensure that businesses in Wisconsin won’t face a $431 million state tax for accepting a forgivable Paycheck Protection Program (PPP) loan.
As many are aware, last year, the federal government passed the CARES Act to help businesses stay open and keep people employed during the government restrictions due to the Coronavirus pandemic, and the PPP loans were part of that legislation.
There were two rounds of federal PPP loans.
Initially, the IRS determined that since the loans were not taxable income, the payments made using those funds were not tax-deductible. The second round of PPP loans was considered income under state level, which allowed deductions for business expenses.
The United States Congress then approved the Consolidated Appropriations Act of 2021, which permitted loan recipients for both rounds of PPP loans to exclude the loan amount from their taxable incomes and permitted businesses to deduct qualified expenses.
The legislation approved in the Assembly mirrors the federal level changes to align Wisconsin with federal law and simplify the tax code.
