CA taxation of PPP loan forgiveness timing - Spidell

CA taxation of PPP loan forgiveness timing

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Message Board CA taxation of PPP loan forgiveness timing

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    • #269162
      Marc Lund
      Participant

      California will be taxing any loan forgiveness of the PPP loans. The question I have is the timing of when it is taxable. For a cash basis taxpayer, is it when they submit the application ( assume granted), when the lender approves, or when the SBA approves? Since the time it takes for the whole process can be up to 5 months, we are getting to the point where it most likely will not have the final approval until 2021. Is that when it is taxable to CA? Any thoughts?

    • #269180
      William Dewberry
      Participant

      Our clients, and us, who received a PPP loan signed a a note for that loan, if and when that loan is forgiven, and the note is cancelled, that date determines income from debt forgiveness.

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