Paycheck Protection Program (PPP) loans given to New Jersey businesses during the COVID-19 pandemic will be exempt from state income taxes.
Any business expenses paid using proceeds from PPP loans will remain deductible for the 2020 tax year. Related expenses paid for with PPP loan proceeds will be deductible for both Gross Income Tax (GIT) and Corporation Business Tax (CBT) purposes, and forgiven loans will be excluded from being subject to either tax.
New York State has previously provided loan forgiveness income will not be taxable and associated expenses will be deductible. The federal government also already stated that PPP loans are exempt from federal taxes.
KRS professionals are available and happy to assist with loan and grant applications. Visit the KRS Coronavirus Resources Page for additional information. Please contact us if you have any questions, concerns, or need advisement during this unprecedented time.