Governor Northam has signed SB 1146 and HB 1935 which conforms Virginia’s tax code to federal tax provisions from the taxable year 2020. Because of the bill’s emergency clause, conformity goes into effect immediately and is retroactive.
Businesses can exclude the full
forgiven loan amount as well as deduct up to $100,000 of business expenses
related to the PPP or Rebuild Virginia Loan. The $100,000 cap will allow full
deductibility for 80% of Virginia Small Businesses that received a PPP loan.
Rebuild Virginia grants will receive the same tax treatment.
Here are the main components of
the legislation: