As many Kentucky businesses have receive loans to help them pay employees in the midst of the COVID-19 pandemic, that income for a forgivable Paycheck Protection Program (PPP) loan has been deemed non-taxable at the federal level.
House Bill 278, sponsored by Rep. Patrick Flannery, would allow small businesses and self-employed individuals in Kentucky who have received a forgivable PPP loan to deduct expenses paid with the loan. .
“Without this bill small businesses will be on the hook for around $250 million in taxes at a time when they could be using income to create jobs and fuel our economic recovery,” Kentucky Chamber Vice President of Public Affairs Kate Shanks said in support of the bill.
Flannery said the legislation will not lead to a windfall for larger businesses but will instead protect Kentucky’s small businesses from a large tax burden.
House Bill 278 passed through the House Appropriations and Revenue Committee with little discussion and now moves to the House floor for a vote.