Governor Newsom Signs Paycheck Protection Program (PPP) Conformity Bill
On April 29, Governor Newsom signed AB 80
, bringing California into partial conformity with federal law. AB 80 allows businesses to deduct the cost of expenses paid for using forgiven federal PPP loans or Economic Injury Disaster Loan (EIDL) funds.
As we noted in a previous issue of our newsletter
, publicly traded companies are ineligible to deduct business expenses paid for with forgiven PPP or EIDL funds. Also ineligible are businesses that do not meet the 25 percent reduction in gross receipts eligibility requirements for second draw PPP loans
, as laid out in the Consolidated Appropriations Act of 2021.
FTB also addressed PPP loan forgiveness and the treatment of related expenses in an April 30 article
. We look forward to further FTB guidance on AB 80’s implementation in the coming weeks, and will share additional resources as they become available.