While the federal Covid relief bill addresses a key concern for small businesses with forgivable loans, these firms could still face a tax hit — this time on their state returns.
In addition to pledging stimulus checks to American households and providing a $300 boost to unemployment payments, the new Covid bill offers aid to ailing small businesses in the form of a second forgivable loan from the Paycheck Protection Program.
Generally, borrowers may be eligible for PPP loan forgiveness if at least 60% of the proceeds go toward payroll expenses. Partial loan forgiveness may be available to those who fall short of the threshold.