The city will provide a gross income exclusion from the city's net profits tax and its business income and receipts tax for any forgiven amounts of Paycheck Protection Program loans granted under the Coronavirus Aid, Relief and Economic Security Act
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Additionally, the city will conform to the CARES Act's increased business expense deduction limitation under Internal Revenue Code Section 163(j)
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For businesses that received the federal employee retention credit, Philadelphia will include qualified wages paid to employees as taxable compensation for city wage tax purposes. Employers that are subject to the city's business income and receipts tax should follow the federal treatment of qualified wages when determining their deductions, and the credit will not be treated as gross income to the employer, the notice said.
--Editing by Robert Rudinger.
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