Businesses throughout Minnesota continue to struggle their way through the COVID-19 pandemic. With tax filing season upon us, it is time to help employers who have sacrificed, yet still maintained paychecks for their employees.
Lawmakers in Minnesota can ease some of this uncertainty, support struggling small businesses and propel the state toward economic recovery by preventing taxes on Paycheck Protection Program (PPP) loans.
PPP was a major component of federal COVID-19 relief legislation, providing forgivable loans small businesses need to pay employees and cover expenses throughout the pandemic. Congress didn’t intend to tax the forgiven PPP loans, and businesses are allowed to deduct the associated payroll costs and eligible expenses paid for with PPP loans.
Unfortunately, Minnesotans will not see this relief on their state tax returns unless the legislature and Governor Walz act soon to align Minnesota’s tax code with the changes in Congress’s COVID-19 relief packages.