Special PPP update for California taxpayers

Author: Wendy Klein CPA Professional Corporation | | Categories: Accountant , Accounting Services , Bookkeeping Services , Business Consulting , Business Startup Services , Certified Public Accountant , CPA , CPA Firm , Cryptocurrency , QuickBooks ProAdvisor , Tax Accountant , Tax Consultant , Tax Planner , Tax Planning , Tax Preparation , Tax Preparer , Tax Services , Trust and Estate Taxation , Virtual Currency Taxation

Blog by Wendy Klein CPA Professional Corporation

The new covid relief bill clarified that borrowers who have loans forgiven may claim deductions for expenses even if expense were paid with loan amounts that were forgiven. This applies to all PPP loans.

California DOES NOT confirm to this federal law, which is amended as part of the stimulus package. Taxpayers will still be required to reduce their deductions on the California return because California enacted AB 1577 (Ch. 20-39), which specifically prohibits taxpayers from claiming any deductions or credits for expenses that are paid with forgiven PPP loan amounts.