Senate File 364 - Introduced SENATE FILE 364 BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO SSB 1175) A BILL FOR An Act allowing certain deductions relating to the paycheck 1 protection program loan forgiveness, and including effective 2 date provisions. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 2503SV (2) 89 jm/jh

S.F. 364 Section 1. FEDERAL PAYCHECK PROTECTION PROGRAM. 1 Notwithstanding any other provision of the law to the contrary, 2 for any tax year ending after March 27, 2020, Division N, Tit. 3 II, subtit. B, §276 and §278(a), of the federal Consolidated 4 Appropriations Act, 2021, Pub. L. No. 116-260, applies in 5 computing net income for state tax purposes under section 422.7 6 or 422.35. 7 Sec. 2. EFFECTIVE DATE. This Act, being deemed of immediate 8 importance, takes effect upon enactment. 9 EXPLANATION 10 The inclusion of this explanation does not constitute agreement with 11 the explanation’s substance by the members of the general assembly. 12 This bill allows certain deductions relating to the paycheck 13 protection program loan forgiveness. 14 Under current law, for the tax year 2020 and later, Iowa 15 law fully conforms with the federal treatment of forgiven 16 paycheck protection program loans and excludes such amounts 17 from net income and allows certain deductions for business 18 expenses paid using those loans. For fiscal-year filers who 19 received paycheck protection program loans during the 2019 tax 20 year, current law excludes such amounts from net income, but 21 does not allow certain deductions for business expenses paid 22 using those loans. The bill fully conforms with federal law 23 for those fiscal-year filers who previously were excluded from 24 such conformity and allows such filers to take business expense 25 deductions using federal paycheck protection program loan 26 proceeds that were forgiven. 27 The bill takes effect upon enactment. 28 -1- LSB 2503SV (2) 89 jm/jh 1/ 1