Posted on May 23, 2021 by email@example.com in Don't Miss This
No MN Tax on Forgiven PPP Loans
On Monday, May 17th, Gov. Tim Walz and legislative leaders announced they had agreed on a state budget deal that will bring Minnesota’s taxes on unemployment payments and forgiven Paycheck Protection Program (PPP) loans in line with the federal government’s. Specifically, the state will exempt $10,200 of unemployment benefits from state income taxes and will exempt all forgiven PPP loans.
The deal won’t be formalized until a Special Session is convened – expected in mid-June.
The Department of Revenue has indicated it will review the law and determine whether adjustments can automatically be made on 2020 returns which have already been filed. If the state can’t make automatic adjustments, it will notify taxpayers and ask them to file an amended return.
“We will try to adjust as many of those returns as we can automatically,” said Revenue Commissioner Robert Doty in a tax bill conference committee. “But there will be a significant number of those that we will not be able to adjust automatically and, quite frankly, that will depend on the complexity of the returns,” as well as the complexity of any tax bill passed.