SF 364 (LSB 2503SV (2) 89)

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 protection program loan forgiveness, and including effective date provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  FEDERAL PAYCHECK PROTECTION PROGRAM.  

Notwithstanding any other provision of the law to the contrary, for any tax year ending after March 27, 2020, Division N, Tit. II, subtit. B, §276 and §278(a), of the federal Consolidated Appropriations Act, 2021, Pub. L. No. 116-260, applies in computing net income for state tax purposes under section 422.7 or 422.35.
    Sec. 2.  EFFECTIVE DATE.  This Act, being deemed of immediate importance, takes effect upon enactment.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill allows certain deductions relating to the paycheck protection program loan forgiveness.
   Under current law, for the tax year 2020 and later, Iowa law fully conforms with the federal treatment of forgiven paycheck protection program loans and excludes such amounts from net income and allows certain deductions for business expenses paid using those loans. For fiscal-year filers who received paycheck protection program loans during the 2019 tax year, current law excludes such amounts from net income, but does not allow certain deductions for business expenses paid using those loans. The bill fully conforms with federal law for those fiscal-year filers who previously were excluded from such conformity and allows such filers to take business expense deductions using federal paycheck protection program loan proceeds that were forgiven.
   The bill takes effect upon enactment.