Skip to main content
NCDOR logo NCDOR

Topical Navigation

  • Home
  • File & Pay
  • Taxes & Forms
    Taxes & Forms
    • Individual Income Tax
    • Sales and Use Tax
    • Withholding Tax
    • Corporate Income & Franchise Tax
    • Motor Carrier Tax (IFTA/IN)
    • Privilege License Tax
    • Motor Fuels Tax
    • Alcoholic Beverages Tax
    • Tobacco Products Tax
    • Partnership Tax
    • Property Tax
    • Collections – Past Due Taxes
    • Business Registration
    • Information for Tax Professionals
    • Policies
    • Order Tax Forms and Instructions
    • Other Taxes And Fees
    • Frequently Asked Questions About Traditional and Web Fill-In Forms
    • IFTA Annual Interest Rates
    • Motor Carrier Seminars
    • Business & Income Tax Seminars
    • Power of Attorney
  • Received a Notice
  • News
    News
    • Notices and Updates
    • Press Releases
    • Reports and Statistics
  • About Us
    About Us
    • Follow Us
    • Administration and Leadership
    • Careers
    • History of Department
    • DORSAT
    • Public Participation Plan
    • IT Information for Bidders
    • Climate Change & Clean Energy: Plans & Progress
    • Mission and Vision
  • Contact Us
    Contact Us
    • E-Alerts
    • Customer Service Numbers
    • Mailing Addresses
    • Media Requests
    • Office Locations
    • Office of the Taxpayer Advocate
    • Records Requests
    • Report Tax Fraud
    • Request a Speaker for Your Group
    • Request a Service Center Appointment
    • Report Identity Theft
    • Customer Education
  • NC.GOV
  • AGENCIES
  • JOBS
  • SERVICES
GET THE LATEST INFORMATION Most Service Centers are now open to the public for walk-in traffic on a limited schedule. Appointments are recommended and walk-ins are first come, first serve. Walk-ins and appointment information
NCDOR »   Taxes & Forms »   Individual Income Tax »   Paycheck Protection Program

Paycheck Protection Program

Paycheck Protection Program Loan Forgiveness

The amount of loan forgiveness under a Paycheck Protection Program (“PPP”) loan is not taxable for state income tax purposes to the extent the amount of loan forgiveness is excluded from federal gross income.

Expenses Deducted Under a Forgiven PPP Loan

The 2020 General Assembly enacted G.S. 105-153.5(c2)(20) (for individuals) and G.S. 105-130.5(a)(32) (for corporations) requiring North Carolina taxpayers to addback the amount of expenses deducted under the Code to the extent that expenses were paid with forgiven PPP loan proceeds. Importantly, the 2021 General Assembly retroactively amended G.S. 105-130.5(a)(32) and G.S. 105-153.5(c2)(20), delaying the State’s decoupling adjustment. As amended, a taxpayer is not required to add to federal income the amount of otherwise deductible expenses paid with forgiven PPP loan proceeds until tax years beginning on or after January 1, 2023. Because the General Assembly chose to suspend the State-level PPP addback until 2023, North Carolina conforms to the federal treatment of expenses paid by PPP loans for tax years 2020 and 2021.

Additional Resources

For more information, see the Department's Important Notice: Impact of Session Law 2021-180 on North Carolina Individual and Corporate Income Tax Returns.

Individual Income Tax

  • Getting Started With Your State Income Taxes
  • Individual Income Filing Requirements
  • Armed Forces Information
  • Nonresidents and Part-Year Residents
  • North Carolina Standard Deduction or North Carolina Itemized Deductions
  • Bailey Decision Concerning Federal, State and Local Retirement Benefits
  • Paycheck Protection Program
  • Social Security and Railroad Retirement Benefits
  • Military Retirement

Share this page:

  • Facebook
  • Twitter
  • Email

How can we make this page better for you?

Back to top

Contact Information

North Carolina Department of Revenue

PO Box 25000
Raleigh, NC 27640-0640
General information: 1-877-252-3052
Individual income tax refund inquiries:
1-877-252-4052

Activity Feed

Tweets by NCDOR

Follow Us

  • Facebook
  • Twitter
  • Instagram
  • YouTube
  • LinkedIn
  • EMPLOYEE DIRECTORY
  • Translation Disclaimer
  • nc.gov
  • Website Feedback
  • Accessibility
  • Disclaimer & Terms of Use
  • Privacy Policy
  • Open Budget
NCDOR
https://www.ncdor.gov/taxes-forms/individual-income-tax/paycheck-protection-program