On January 13, 2021, New York State issued an update on tax conformity related to tax stimulus provisions passed by Congress throughout 2020. One significant change is related to the taxability of the Paycheck Protection Program (PPP) loan forgiveness income and the related deductibility of expenses paid with PPP funds. New York State has posted that the loan forgiveness income WILL NOT be taxable and the associated expenses WILL be deductible. All indications prior to this, including 2020 form instructions, required taxpayers to increase their NYS income by the forgiveness amounts in the year forgiveness was received by the SBA.
This is tremendous news for taxpayers and small businesses in New York State. For more information, you can link to the New York State Department of Taxation and Finance here https://www.tax.ny.gov/pit/cares-act-faq.htm.
As always, please reach out to your TBC advisor with any questions.