North Carolina DOR Clarifies Paycheck Protection Program Loan Forgiveness Tax Treatment

The North Carolina Department of Revenue (DOR) clarified that the Paycheck Protection Program (PPP) offers loan forgiveness that is not taxable for state income tax purposes if it is excluded from federal gross income. The state taxpayers must add back expenses deducted under the Code if those expenses were paid with forgiven PPP loan proceeds. [N.C. Dep’t of Revenue, Paycheck Protection Program, 11/25/25]

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