Senate Study Bill 1175 - Introduced SENATE FILE _____ BY (PROPOSED COMMITTEE ON WAYS AND MEANS BILL BY CHAIRPERSON DAWSON) A BILL FOR An Act allowing certain deductions relating to the paycheck 1 protection program loan forgiveness. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 2503XC (1) 89 jm/jh

S.F. _____ 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 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 allows certain deductions relating to the paycheck 11 protection program loan forgiveness. 12 Under current law, for the tax year 2020 and later, Iowa 13 law fully conforms with the federal treatment of forgiven 14 paycheck protection program loans and excludes such amounts 15 from net income and allows certain deductions for business 16 expenses paid using those loans. For fiscal-year filers who 17 received paycheck protection program loans during the 2019 tax 18 year, current law excludes such amounts from net income, but 19 does not allow certain deductions for business expenses paid 20 using those loans. The bill fully conforms with federal law 21 for those fiscal-year filers who previously were excluded from 22 such conformity and allows such filers to take business expense 23 deductions using federal paycheck protection program loan 24 proceeds that were forgiven. 25 -1- LSB 2503XC (1) 89 jm/jh 1/ 1