1. (a) Any amount of cancellation of indebtedness income resulting from a loan forgiven under Section 1106 or Section 1109 of the federal Coronavirus Aid, Relief, and Economic Security Act as redesignated or amended by the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act, Pub. L. 116-260, or under Section 311 thereof:

   1. (1) Shall be exempt from the financial institution excise tax imposed by Chapter 16 and the income taxes imposed by this chapter to the same extent as the amount is exempt from the federal income tax under Sections 276 or 278 of the RELIEF Act.
   2. (2) Shall not be considered in determining the deductibility of otherwise deductible expenses, such as payroll, utilities, mortgage interest, and rent, allowed to be paid with the exempt funds, to the same extent as the expenses remain deductible in calculating federal income tax under Sections 276 or 278 of the RELIEF Act.
   3. (3) Shall also be excluded from any and all calculations in determining a taxpayer’s federal income tax deduction pursuant to Chapter 16 or this chapter.
2. (b) This section applies to tax years ending after March 27, 2020.

(Act 2021-1, §3.)