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Bradley Arant Boult Cummings LLP 

August, 2020 - United States of America

 

 

Bradley Partner Bruce Ely Quoted in Alabama Daily News on State Taxing Virus Relief Funds

 

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Bradley attorney Bruce Ely was quoted in Alabama Daily News on the potential of coronavirus relief funds being taxed by the state of Alabama if legislative action isn't taken. Several state legislators say the state intends to un-tax the relief funds, including stimulus checks of up to $1,200 per person and forgiven PPP loans to businesses, but state statutes must be tweaked to match federal law. With the Legislature not scheduled to meet again until February, it’s a matter of exactly how and when to do that. Meanwhile, many Alabamians likely assume their relief money is tax-free.

“That’s going to be a surprise to a lot of people,” said Ely. “I would bet that very few Alabama businesses know about this gotcha.”

Ely said most state leaders agree that a fix is needed, it’s just a matter of when. He is still hopeful for a special session.

In the meantime, Ely said, those who pay their estimated income taxes quarterly should in theory be paying tax on the COVID-19 relief money.

“I guarantee you, most Alabamians have no idea these federal tax rebates or the PPP loan forgiveness are currently taxable,” he said.

The original article, "Could the State Tax Virus Relief Money? Yes, but Lawmakers Want to Change That," appeared in Alabama Daily News on August 17, 2020.

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