On Thursday, February 18, 2021 Gov. Evers signed AB2 that allowed the deductions used for the PPP forgiveness to be deductible expenses.
Good news for Wisconsin businesses that received PPP loans! Gov. Evers has just signed into law a bill that makes loans administered through the federal government’s Paycheck Protection Program tax-free for Wisconsin Businesses.
According to the SBA, over 89,000 Wisconsin businesses were approved for a total of approximately $9.9 billion in PPP loans. If we assume, 70% of the loans ($6.9 billion) are forgiven, that would translate into a collective tax bill of about $480 million for Wisconsin businesses. Congress intended for PPP loans to be a tax-free lifeline to small businesses harmed by the pandemic. Wisconsin has just taken legislative action eliminating the state taxes on those forgiven loans. Many companies have held off on finalizing their 2020 tax returns until there was a final decision on this taxability issue. Wisconsin businesses can breathe a sigh of relief that their much-needed PPP funds will not be taxable on a federal or state level.
Looking for more information on PPP loans Round 1 or 2 or your loan forgiveness options?
Check out our recent SVA webinar here: PPP Funding/Forgiveness & the Relationship to Employee Retention Credits.
Confused about the Employee Retention Credit? Download our resource guide here: Employee Retention Credit- You Could Be Leaving Money on the Table