New York State will not tax the income from the forgiveness of PPP loans, nor disallow any of the deductions related to this income. In other words, they will follow the federal treatment which is favorable to NYS taxpayers.
The NYS Department of Taxation and Finance provided the following information on its website related to this topic:
Question: Are Payroll Protection Program (PPP) loans that are forgiven subject to New York State personal income taxes?
Question: Are expenses associated with PPP loans deductible for New York State personal income tax purposes?
The information presented here should not be construed as legal, tax, accounting, or valuation advice. No one should act on such information without appropriate professional advice and after a thorough examination of the particular situation.