Paycheck Protection Program (“PPP”) and State Taxes

The IRS had said that expenses paid for with PPP loans that were or would be forgiven could not be deducted for federal tax purposes. In the second round of federal coronavirus relief, issued in December, Congress reversed that directive, allowing these federal tax deductions. For businesses in Wisconsin, the state Department of Revenue last week announced its adherence to prior PPP restrictions, meaning businesses in Wisconsin will not be able to make corresponding state tax deductions.