NFIB State Director Tom Underwood said small business owners stand to lose millions of dollars unless the General Assembly votes to let them deduct forgiven expenses paid for with federal Paycheck Protection Program (PPP) loans on their Kentucky income taxes.
“They can deduct these expenses on their federal income taxes, but Kentucky says they can’t deduct them on your state taxes, and that’s not fair,” Underwood said. The federal COVID-19 recovery act signed into law last month reversed an IRS ruling and clarified that PPP forgiven expenses are deductible.
“The pandemic has had a big impact on the state’s economy, and that’s affecting tax revenue,” Underwood said. “But lawmakers have to understand that small businesses from Paducah to Pikeville are barely hanging in there.” One in four small businesses nationwide surveyed last month by the NFIB Research Center warned they would have to close within six months unless economic conditions improve soon.
“Small businesses are especially vulnerable right now,” Underwood said. “That’s why our members are asking their legislators to vote ‘yes’ when it comes to deducting costs associated with staying open and keeping people employed during these difficult times.”