Skip to main content

Site Navigation

Site Search

global Tax

RI DOT Releases Further Guidance on Tax Treatment of PPP Loan Forgiveness Amounts

October 25, 2021

Attention Rhode Island PPP borrowers…did you take out a Paycheck Protection Program loan in an amount exceeding $250,000? Recent guidance may impact you.

If you received loan forgiveness for a PPP loan exceeding $250,000, the excess amount is taxable income for Rhode Island tax purposes. On October 20, 2021 the Department of Taxation (DOT) released further guidance along with a form to report the amount by which loan forgiveness exceeds $250,000. Here’s what you should know.

PPP Refresher

The Coronavirus Aid, Relief and Economic Security (CARES) Act offers many provisions to assist companies impacted by the COVID-19 pandemic, including the Paycheck Protection Program.

Visit our PPP Headquarters for all the details on the three rounds of PPP funding.

What’s new in Rhode Island?

Check out our blog, RI DOT Releases Guidance on PPP Loans for details on the original DOT guidance regarding taxes on PPP loans. The latest guidance provides a new form – Form RI-PPP. The form provides instructions for making tax payments on the taxable portion of forgiven loans. Those with PPP loan forgiveness amounts exceeding $250,000 will receive the form and its instructions. The mailing is set to begin on or around November 1, 2021.

What entities are impacted?

Each entity that had PPP loan forgiveness exceeding $250,000 for 2020. Entities treated as C corporations for federal tax purposes and entities treated as pass-through entities for federal tax purposes will receive the form.

There will be two versions of the form, one for entities and one for individuals but the DOT expects the form for individuals to be rarely used. The form for individuals will only be available online.

What is the deadline to submit Form RI-PPP?

The form must be completed by December 15, 2021.

Is payment due the same time?

No. Although you may include a check for payment at the same time you submit the form, you have until March 31, 2022 to make payment.

We strongly recommend you contact your tax advisor to review the form with you before submitting it to the State. There is an option to have the individual owners report the income rather than the entity itself. In some cases, that may be more beneficial, especially if the individuals have losses that can help offset the additional income.

Questions? Contact us.

Stay informed. Get all the latest news delivered straight to your inbox.

Also in Tax Blog

up arrow Scroll to Top