Sponsored by:
Senator TROY SINGLETON
District 7 (Burlington)
Senator ANTHONY M. BUCCO
District 25 (Morris and Somerset)
Co-Sponsored by:
Senators Oroho, Pou, Greenstein, O'Scanlon and Holzapfel
SYNOPSIS
Allows deduction from tax of certain expenses when taxpayer’s federal paycheck protection program loan is forgiven and excludes those forgiven loans from gross income tax.
CURRENT VERSION OF TEXT
As reported by the Senate Budget and Appropriations Committee on January 21, 2021, with amendments.
An Act concerning the tax treatment of forgiven federal paycheck protection program loans.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Notwithstanding N.J.S.54A:5-1, a loan, or portion thereof, forgiven pursuant to section 1106 of the federal CARES Act, Pub.L.116-136, 1or any subsequent expansion of the federal Paycheck Protection Program, including the provision of second draw loans pursuant to section 311 of Division N of the “Consolidated Appropriations Act, 2021,” Pub.L.116-260,1 shall not be included in the calculation of New Jersey gross income subject to tax under the New Jersey Gross Income Tax Act.
2. a. A taxpayer under the Corporation Business Tax Act (1945), P.L.1945, c.162 (C.54:10A-1 et seq.) shall not be denied a deduction by reason of the exclusion from entire net income under P.L.1945, c.162 of a loan, or portion thereof, forgiven pursuant to section 1106 of the federal CARES Act, Pub.L.116-136 1or any subsequent expansion of the federal Paycheck Protection Program, including the provision of second draw loans pursuant to section 311 of Division N of the “Consolidated Appropriations Act, 2021,” Pub.L.116-2601.
b. A taxpayer under the 1[New Jersey Gross Income Tax Act] “New Jersey Gross Income Tax Act,” N.J.S.54A:1-1 et seq.1 shall not be denied a deduction by reason of the exclusion from New Jersey gross income under the New Jersey Gross Income Tax Act of a loan, or portion thereof, forgiven pursuant to section 1106 of the federal CARES Act, Pub.L.116-136, 1or any subsequent expansion of the federal Paycheck Protection Program, including the provision of second draw loans pursuant to section 311 of Division N of the “Consolidated Appropriations Act, 2021,” Pub.L.116-260,1 or pursuant to section 1 of this act.
3. This act shall take effect immediately.