Resolution urges Congress to exempt CARES funds from taxation

A resolution recently introduced in the state House urges the U.S. Congress to exempt federal CARES Act small business relief from taxation.

Earlier this year, the state General Assembly allocated a portion of the CARES Act funding to small business relief to help mitigate the impact of the COVID-19 pandemic.

The U.S. Internal Revenue Service said the relief will be taxed at the federal level.

“This punishes already struggling small and local businesses for taking advantage of this critically necessary aid,” State Rep. Joe Ciresi (D-Montgomery), who introduced the resolution, said. “Congress must pass legislation to protect these businesses and exempt this relief from taxes, and this resolution urges them to do so. Small businesses are the backbone of our commonwealth’s economy and have already been severely impacted by closures forced by COVID-19.”

Ciresi said he spoke to several business owners in his district on the issue.

“The relief that was supposed to ensure that they could stay afloat has become a burden to small businesses, inhibiting their ability to recover and provide high-quality jobs across the state,” Ciresi said. “The small business owners in my district and across Pennsylvania are counting on us to make sure their voices are heard.”

The resolution was referred to the House Finance Committee.