Question on MN returns for expenses paid with forgiven PPP funds. It is my understanding from what i have read and talking to another tax preparer that Minnesota has not yet conformed to Federal position that expenses paid with forgiven PPP funds can also be deducted. I have looked at the Minnesota NC forms (individuals, S corp etc) and the instructions for that line on the NC form are very confusing. Based on what the instructions for that line states, it seems to say that there is no adjustment that needs to be made. But it is my understanding that MN still considers these expenses as non deductible since they are/were paid with tax exempt funds. I would appreciate any help/response in this area. Thanks.
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They just re-worded the instructions a short time ago. It makes much more sense now.
You just include the forgiven PPP in your MN income.
If you excluded loan forgiveness from your income under the Paycheck Protection Program on your federal return, include the amount of the forgiven loan on line 9.
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Thanks for the reply. I just looked at the NC form for another client i was working on late yesterday and saw that the state changed the instructions for that line and now it clearly states that these expenses are not allowed on MN. I guess i should have waited a day for posting this question. Thanks again for your postComment
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Yeah, I had sent an email to the MN Department of Revenue because the prior instructions did not make any sense. I'm glad to see they corrected/clarified it.Comment
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