Wisconsin passes law protecting Paycheck Protection Program recipients from taxation
Wisconsin legislation that makes forgiven second-round Paycheck Protection Program loan income non-taxable has been signed into law.
Governor Tony Evers signed Senate Bill 2 Thursday, the omnibus bill to modernize the state tax code and state Department of Revenue operations. The bill was amended by Republicans to make Wisconsin’s Department of Revenue match federal tax code by not taxing the forgiven PPP proceeds.
Democrats including Representative Robyn Vining supported an amendment to cap deductions for expenses paid with PPP dollars at $250,000 saying the cap would not impact 90% of the loan recipients, but Republicans stopped the effort saying Wisconsin’s businesses didn’t need another kick in the gut from the state while recovering from the pandemic.
The PPP taxation change is just one part of the package which would affect the state’s Department of Revenue and tax policy. Evers says the new law provides approximately $450 million in tax relief to Wisconsin businesses and $30 million more in tax relief to low-income families by aligning state tax law to federal law.
Proceeds from forgiven PPP loans are not taxable at the federal level, but individual states have the authority to tax those dollars.