Important information for taxpayers from the Massachusetts Department of Revenue
PPP loan forgiveness income
The CARES Act provides that any cancelled indebtedness from the Paycheck Protection Program (PPP) is excluded from gross income for federal income tax purposes.
As you may know, legislation is currently pending that would change the rules about the Massachusetts tax treatment and reporting of forgiven PPP loan income. If the legislation passes, Mass. DOR will update the information on the FAQ webpage.
In other words:
PPP loan forgiveness does not need to be reported as income for federal income tax purposes. Massachusetts has pending legislation regarding taxation of PPP loan income.