FRANKFORT, KY (February 25, 2021) – The House of Representatives passed legislation on Wednesday that would help Kentucky law conform with federal law to allow deductions paid with proceeds from loans made under the Paycheck Protection Program (PPP). This measure is sponsored by Representative Patrick Flannery of Olive Hill.
“The PPP loan program was designed to help keep small businesses open and employees paid during the COVID-19 pandemic. Three-quarters of all eligible Kentucky small businesses took advantage of the PPP loans,” said Flannery. “Many are still hurting and were closed due to no fault of their own.” “Nearly identical legislation has passed at the federal level and this bill is needed to do the same at the state level.”
The U.S. Small Business Administration implemented the $669-billion business program that was established by the 2020 US Federal government CARES Act. The goal is to help individual businesses, self-employed workers, sole proprietors, specific nonprofit organizations, and tribal enterprises continue paying their workers. It allows entities to apply for low-interest private loans to pay for their payroll and certain other costs.
HB 278 will help struggling small businesses and the self-employed by offering tax relief on state tax filings for entities who received federal PPP loans. This legislation would conform Kentucky law to existing federal statutes created by The Heroes Act.
Kentucky has received $5.3 billion in PPP loans to keep businesses operational.
House Bill 278 will move to the Senate for further consideration in the upcoming weeks of the 2021 general session. To review co-sponsors and specific details of the measure, please visit the Legislative Research Commission website or follow the link here.