In a press release issued yesterday, Governor Murphy confirmed what many New Jersey business owners were hoping for: state tax relief on Paycheck Protection Program (PPP) loans.
Conforming to the federal treatment of PPP loans, the state made it official that PPP loan proceeds will not be taxed by New Jersey, and all related expenses will be deductible for both gross income tax (GIT) and corporation business tax (CBT) purposes. The release clarifies that no further legislation will be needed to make these benefits effective.
New York State announced the same treatment of PPP loans last month, while other states vary in their taxation of PPP proceeds and/or the deductibility of expenses paid for with forgiven loan funds.
If you have any questions about how this update affects your 2020 New Jersey tax returns or how your PPP loan will be treated in other states, please contact your Grassi tax advisor or Michael Hochman at email@example.com.