On Wednesday, January 6th, 2021, the Small Business Administration and U.S. Treasury released additional guidance through interim final rules for the Paycheck Protection Program (PPP) loan program and the new legislation (Coronavirus Response and Relief Supplemental Appropriations Act of 2021) signed into law at the end of December.
The most recent changes allow the PPP loans to be forgiven and not taxed and allow expenses to be deductible. Minnesota is a static conformity state and does not automatically conform to federal tax law changes and will tax loan forgiveness barring legislative change at the state level.
The Minnesota legislative session started Jan. 5 and legislators have until May 17 to complete their work and pass a state budget. Legislators typically take the entire session to pass a budget and tax bill, including any conformity that, if passed in May would most likely be retroactive.