Gov. Tony Evers today signed Assembly Bill 2, now 2021 Wisconsin Act 1, providing approximately $450 million in tax relief to Wisconsin businesses and $30 million more in tax relief to low-income families by adopting federal changes to align state tax law.
Most notably, this Act adopts the federal treatment of deductibility of expenses paid with funds received from forgivable Paycheck Protection Program (PPP) loans. This Act also adopts the federal treatment of nontaxable income from Economic Injury Disaster Loan (EIDL) advances, as well as nontaxable treatment of debt forgiveness income from Section 7(a) SBA loan payment assistance provided for under the CARES Act. In addition, this Act also provides for nontaxable treatment, for Wisconsin purposes, of income received in the form of a grant issued by a state agency or the Wisconsin Economic Development Corporation during and related to the COVID-19 pandemic, and provides a deduction for expenses paid with the grant money.
Gov. Evers also signed Assembly Bill 3, now 2021 Wisconsin Act 2, which makes favorable changes to the tax treatment of pass-through entities that elect to pay income or franchise tax at the entity level.
Full text of the Acts can be found below: