New York State Will Not Tax PPP Loan Forgiveness

The New York Department of Taxation and Finance announced that the state will conform to federal rules on the taxation of forgiven loan funds received through the Paycheck Protection Program (PPP). As stated in the CARES Act, the forgiveness of a PPP loan is tax-exempt. For business income tax purposes, New York will treat this income the same way: tax-exempt.

The federal and state provisions apply to both first draw and second draw PPP loans. Additionally, New York will conform to the federal government’s position that expenses funded with PPP loan funds are tax-deductible.

Robert L. Tobey Robert L. Tobey, CPA is a Partner in the Tax Services practice at Grassi, where he guides clients through the complexities of tax planning and compliance on the federal, state and international levels. He specializes in helping pass-through entities, multi-state corporations, high-net-worth individuals and investors meet their business, tax savings and wealth preservation goals. Robert advises clients in a wide range of industries, with... Read full bio