There are rumbling that the Illinois legislature will try to balance the budget off the backs of small business owners. The latest proposal would be for the state to tax Paycheck Protection Program (PPP) loans.
The federal COVID-19 recovery act signed into law in December reversed an IRS ruling and clarified that PPP forgiven expenses are deductible at the federal level. This was the intent of the program when it was created by Congress.
NFIB in Illinois recently balloted this issue and found that 91.5% of members believe that the state should not tax forgiven PPP loans.