Short Answer: No UNLESS you are a publicly traded company or a business that did not experience the 25% year-over-year decline in gross receipts.
Longer Answer: California signed into law Assembly Bill 80 on 4/29/2021, which makes forgiven PPP loans tax exempt for all businesses except publicly traded companies and those businesses that did not see a 25% reduction in gross receipts from 2019 to 2020. This is in conformity with federal tax treatment.
If you received a PPP loan in 2020, you may have been eligible to apply for a second PPP loan if your business suffered a loss in revenue from 2019 to 2020 (25% reduction in gross receipts). If you did not request a second draw for your business, this means you have not had to prove the 25% reduction and therefore the first loan, if forgiven, is taxable income.
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*This material is intended for general information purposes only and does not constitute legal advice. Each case requires unique legal analysis of law and facts. For legal issues that arise, the reader should consult legal counsel.