ThomasM125
Employee Tax Expert

State tax filing

I think what happened here is originally, when you excluded the PPP grants from taxation, you weren't allowed to deduct the expenses the funds were spent on. For instance, if you received $8,000 in PPP money and used it for payroll in the amount of $8,000, you didn't have to include the $8,000 in tax income, but you couldn't deduct the $8,000 in payroll expense either. So, you would have expenses that weren't deductible if you had the loan forgiven.

 

That regulation was changed a couple of months ago to allow you to deduct the expenses and exclude the grant from taxable income. So, you probably don't have any expenses that would have been deductible if you had not claimed the loan forgiveness treatment. The wording was once applicable, but is no longer.

 

 

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