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Wisconsin governor signs conforming legislation

Mar 01, 2021

On February 18, 2021, Wisconsin governor Tony Evers signed into law legislation (Act 1) conforming Wisconsin law to certain provisions of Public Law 116-260 (Consolidated Appropriations Act, 2021).

The bill adopts for state-income and franchise-tax purposes various provisions of the federal Internal Revenue Code, including provisions of the Consolidated Appropriations Act, 2021, related to the  Paycheck Protection Program (PPP), the Economic Injury Disaster Loan (EIDL) program, payment assistance for certain loan programs, and grants to shuttered venue operators.

Specifically, Wisconsin has adopted the following conformity provisions:

  • The forgiveness of “original” and “subsequent” PPP loans will be excluded from Wisconsin taxable income. (Wisconsin previously allowed only “original” PPP loan forgiveness to be excluded from income as part of Act 185.)
  • Deductions related to original and subsequent PPP loans will be allowed.
  • The forgiveness of the above loans will not reduce basis or tax attributes.
  • S corporation and partnership recipients of the above loans will treat the subsequent forgiveness as tax-exempt income for purposes of section 1366 and 705.

Wisconsin also has adopted federal treatment excluding from income amounts related to:

  • Forgiveness of Emergency EIDL Grants and Targeted EIDL Advances.
  • Subsidies for Certain loan payments under section 1112 of the CARES Act.
  • Grants for Shuttered Venue Operators.

The legislation provides a much hoped for outcome for many Wisconsin taxpayers. If you have any questions about the conformity legislation or need assistance, please reach out.

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Author(s)

Linda J. Feirn, CPA
Partner
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