SSB 1198

_____ income taxes and allowing certain deductions relating to the paycheck protection program loan forgiveness. DIVISION I —— COVID-19 RELATED GRANTS —— TAXATION. The bill excludes from the calculation of Iowa individual and corporate income tax any qualifying COVID-19 grant issued to an individual or business by the economic development authority, the Iowa finance authority, or the department of agriculture and land stewardship. Under the bill, a “qualifying COVID-19 grant” includes any grant identified by the department of revenue by rule that was issued under a grant program administered by the economic development authority, Iowa finance authority, or the department of agriculture and land stewardship to provide financial assistance to individuals and businesses economically impacted by the COVID-19 pandemic. Under current law, financial assistance grants provided to small businesses by the economic development authority under the Iowa small business COVID-19 relief grant program are excluded from the calculation of Iowa individual and corporate income tax. The COVID-19 grant income tax exclusion provided in the bill is repealed on January 1, 2024, and does not apply to tax years beginning on or after that date. The division takes effect upon enactment and applies retroactively to March 23, 2020, for tax years ending on or after that date. DIVISION II —— FEDERAL PAYCHECK PROTECTION PROGRAM. Under current law, for the tax year 2020 and later, Iowa law fully conforms with the federal treatment of forgiven paycheck protection program loans and excludes such amounts from net income and allows certain deductions for business expenses paid using those loans. _____ those loans. The bill fully conforms with federal law for those fiscal-year filers who previously were excluded from such conformity and allows such filers to take business expense deductions using federal paycheck protection program loan proceeds that were forgiven.