The Senate plans to vote on a bill early next week to provide tax relief to businesses that received Paycheck Protection Program (PPP) loans in 2020. The bill would conform to temporary federal tax rules that allow businesses to not be taxed on the loan amounts and also deduct the business expenses those loans helped support.
Senate DFLers successfully added an amendment in Tax Committee this week to ensure Minnesotans who lost their jobs in 2020 also have an opportunity for tax relief. Unemployment benefits are taxable income, but the supplemental $600-per-week and $300-per-week payments approved by the federal government last year were distributed directly to recipients without any tax withholding deducted. That means many taxpayers are facing unexpected tax bills as they file taxes this spring. The DFL amendment would allow unemployed individuals to subtract up to $1,500 of supplemental unemployment payments received in 2020 to help mitigate some of the expense.
A Senate vote on this bill is currently scheduled for Monday. The House of Representatives would need to pass the bill as well before any of these changes could be implemented. (SF 263)