LINCOLN — Businesses that received federal Paycheck Protection Program (PPP) loans to help survive the economic fallout from the coronavirus pandemic are facing a cruel surprise — an unexpected tax bill. While Congress indicated that its intent was that such PPP loans would not create a tax bill, federal tax officials have opined otherwise.

"Businesses are teetering on the edge as it is right now. A hit like that could make or break a small business," said Erica Parks, a Lincoln accountant and the chair-elect of the Nebraska Society of Certified Public Accountants.

The issue has a big impact in Nebraska, which ranked among the top four states in the nation for the percentage of eligible businesses that obtained PPP loans. About 92% of private businesses with employees in the Cornhusker State got the loans, according to the Small Business Administration. For example, a company that received a $150,000 PPP loan this spring is now confronted with being required to pay back as much as $63,000 of it in the form of federal and state income taxes, and self-employment taxes.

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