In a draft technical information release issued Monday, the Massachusetts Department of Revenue explained that recently enacted state legislation provided deductions for unemployment compensation received in 2020 and 2021 and forgiven loans from the Paycheck Protection Program under the federal Coronavirus Aid, Relief and Economic Security Act .
Under the legislation signed into law Thursday, the state will provide individuals a deduction of up to $10,200 of unemployment compensation included in federal gross income if the individual's household income does not exceed the federal poverty line by more than 200%, according to the department. The agency also said it will waive penalties for late payments of tax on unemployment compensation until Jan. 1, 2022.
Additionally, the department said that taxpayers are allowed to deduct the cancellation of debt income from forgiven PPP loans, which mirrors the federal exclusion. Massachusetts will also provide a deduction for other federal COVID-19 relief, including disaster loans and Small Business Administration payments, the agency said, reminding individuals that the state conformed to the federal extension for income taxes.
--Editing by Vincent Sherry.
For a reprint of this article, please contact email@example.com.