PPP Loan and Unemployment Compensation for North Carolina

North Carolina Legislature has passed the budget and voted to have the Paycheck Protection Program (PPP) Loan not taxable.  Unemployment Compensation is still fully taxable.

What does that mean for you if you have timely filed your corporate tax return and individual tax return?  Your tax returns will have to be amended to get back the additional taxes that were paid.

In addition – Federal income, including Economic Injury Disaster Loans (“EIDL”) grants, targeted EIDL advances, and certain Small Business Association (“SBA”) loan payments or other types of income specifically excluded from Federal income are not taxable for North Carolina. These tax returns should file an amended return removing this income.

 

Updated December 27, 2021