Governor Phil Murphy and State Treasurer Elizabeth Maher Muoio announced today that the forgivable Paycheck Protection Program (PPP) loans small businesses received last year, will be exempt from state taxes. Businesses will also be able to deduct business expenses that were paid for with the PPP loans.
This is great news for businesses and follows the December 2020 clarification by Congress that PPP loans would be excluded from income on federal tax returns.
According to the state Treasury, New Jersey businesses received nearly 156,000 loans, totaling $17.3 billion. The vast majority (134,000) were for amounts under $150,000, while the remaining 19,000 loans were for amounts between $150,000 and $1 million.