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Paycheck Protection Program and Pennsylvania

On February 6, 2021, Governor Wolf signed Senate Bill 109 into law. Senate Bill 109 states that Paycheck Protection Program (“PPP”) loan proceeds forgiven is non-taxable income for Pennsylvania personal income tax purposes. This applies to individuals (i.e., sole proprietors) and to pass-through from partnerships and S-corporations. 

The PPP proceeds are also non-taxable for the corporate net income tax, which applies to C-corporations. 

Expenses paid for with PPP proceeds are deductible for Pennsylvania personal income tax and corporate net income tax.

This bill was passed to help Pennsylvania businesses better withstand the pandemic and matches up with federal law.