PPP Loan & Unemployment Compensation – Taxable or Not Taxable for North Carolina

PPP Loan and Unemployment Compensation – Taxable or Not Taxable for North Carolina

The Paycheck Protection Program (PPP) Loan and Unemployment Compensation for the first $10,200 is not taxable on your Individual Federal Tax Return.

North Carolina Legislature has not made a final decision if they will follow the Federal tax return.  The North Carolina House of Representatives has passed a bill to follow the Federal tax return and not have the PPP loan or Unemployment Compensation be taxable.  The North Carolina Senate has not passed the bill.

Once the North Carolina House and Senate come to an agreement we will be able to file final tax returns for North Carolina.

Frequently Asked Questions:

Q:  I already filed my North Carolina tax return and paid tax on the PPP Loan.  How will I get my refund?

A:   We will have to wait for guidance from the North Carolina Department of Revenue.

North Carolina individual, corporate and partnership tax returns that filed timely extensions are due October 15, 2021.

 

Updated August 16, 2021