![Will MN Businesses Be Taxed On Their ‘Forgivable’ PPP Loans?](https://townsquare.media/site/669/files/2020/05/Minnesota_State_Capitol.jpg?w=980&q=75)
Will MN Businesses Be Taxed On Their ‘Forgivable’ PPP Loans?
Local chambers are asking the Minnesota legislature to make changes to Minnesota's tax code so it conforms to the federal law, in order to save small Minnesota businesses money in taxes. Minnesota's legislature, if it does nothing, will end up leaving Minnesota businesses 'on the hook' for the taxes on the PPP forgivable loans they received earlier in the year.
The University of Minnesota Extension Office wrote about this issue back in December, I've included a portion of that article written by Rob Holcomb and Megan Roberts, as to how we got into the position of PPP being taxable in Minnesota and not federally.
"With the passage of new COVID-19 relief legislation on December 21, also known as H.R.133 or the Consolidated Appropriations Act, 2021, taxpayers are no longer required to reduce business expenses on the federal tax return by the amount of PPP loan forgiveness they received or expect to receive in the future. This causes the PPP loan forgiveness to be non-taxable on the federal return but taxable on the Minnesota return.
A Minnesota taxpayer with PPP loan forgiveness starts with PPP forgiveness and then subtracts the amount of reduced expenses from the Federal return. Since there will be no reduction of expenses on the federal return, the total amount of PPP loan forgiveness is an add back on the Minnesota return, thus increasing Minnesota taxable income."
Basically what the above passage is saying is that right now, if you were to do your taxes and you owned a business Minnesota would tax you on your PPP.
My hope is that Minnesota's legislature acts on this problem, and confirms it's tax code to match that of the federal tax code, as PPP was used as a liferaft for many Minnesota businesses, and now it appears that liferaft is headed towards some jagged rocks.
LOOK: 50 photos of American life in 2020
More From KRFO-AM
![Steele County Public Health Hosting Drive-Thru Shot Clinics](http://townsquare.media/site/730/files/2022/09/attachment-GettyImages-1344566518.jpg?w=980&q=75)
![Steele County Public Health Free COVID Vaccine Clinics](http://townsquare.media/site/730/files/2022/09/attachment-GettyImages-1422319464.jpg?w=980&q=75)
![Study: Minnesotans Aren’t Quitting Their Jobs Like Other States](http://townsquare.media/site/150/files/2022/07/attachment-RS48907_GettyImages-959752610-scr.jpg?w=980&q=75)
![Big Crowd Welcomes New Owner to Longtime Owatonna Business](http://townsquare.media/site/687/files/2020/04/Chamber-wagon.jpg?w=980&q=75)
![Owatonna Restaurant Survey Results Announced](http://townsquare.media/site/65/files/2020/10/RS27087_GettyImages-1002295742-scr.jpg?w=980&q=75)
![Where to Dine Outdoors in Central Minnesota](http://townsquare.media/site/65/files/2020/05/RS26088_GettyImages-475888436.jpeg?w=980&q=75)
![E-I-E-I-Oh? This New Agritourism Business Has Opened Up In Northfield Area!](http://townsquare.media/site/685/files/2022/04/attachment-GettyImages-526651806.jpg?w=980&q=75)
![Free At-Home COVID-19 Tests Available for All Minnesotans](http://townsquare.media/site/65/files/2022/02/attachment-annie-spratt-PXZEg4hnyVw-unsplash.jpg?w=980&q=75)
![Faribault Superintendent Masks Now “Strongly Recommended But Not Required”](http://townsquare.media/site/65/files/2021/01/mika-baumeister-uz_T7h8ds04-unsplash.jpg?w=980&q=75)