Senate File 196 - Introduced SENATE FILE 196 BY ZAUN A BILL FOR An Act relating to state deductibility of federal paycheck 1 protection program loan forgiveness. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 1873XS (4) 89 jm/jh
S.F. 196 Section 1. FEDERAL PAYCHECK PROTECTION 1 PROGRAM. Notwithstanding any other provision of the law 2 to the contrary, for any tax year ending after March 27, 3 2020, Division N, Tit. II, Subtitle B, §276 of the federal 4 Consolidated Appropriations Act, 2021, Pub. L. No. 116-260, 5 applies in computing net income for state tax purposes under 6 section 422.7 or 422.35. 7 EXPLANATION 8 The inclusion of this explanation does not constitute agreement with 9 the explanation’s substance by the members of the general assembly. 10 This bill relates to the federal paycheck protection 11 program. Under current law, for the tax year 2020 and later, 12 Iowa law fully conforms with the federal treatment of forgiven 13 paycheck protection program loans and excludes such amounts 14 from net income and allows certain deductions for business 15 expenses paid using those loans. For fiscal-year filers who 16 received paycheck protection program loans during the 2019 tax 17 year, current law excludes such amounts from net income, but 18 does not allow certain deductions for business expenses paid 19 using those loans. The bill fully conforms with federal law 20 for those fiscal-year filers who previously were excluded from 21 such conformity and allows such filers to take business expense 22 deductions using federal paycheck protection program loan 23 proceeds that were forgiven. 24 -1- LSB 1873XS (4) 89 jm/jh 1/ 1