CMA supports bill that would allow physicians to deduct PPP expenses on state income taxes

February 23, 2021

The California Medical Association (CMA) is proud to stand with Assemblymember Autumn Burke in support of AB 80, which will bring full conformity between California state tax code and federal law with regards to Paycheck Protection Program (PPP) loans for the following sectors: restaurants, gyms, cosmetology, outdoor entertainment and health care.

In recent advocacy efforts, CMA lauded the Governor and state legislative leaders for announcing an agreement that would bring California tax law to partial conformity with federal tax policy regarding loans provided by PPP, but was clear that the state still needed to do more to help physician practices that have been significantly and disproportionately affected by the COVID-19 pandemic and that continue to struggle with its effects.

AB 80 is a critical piece of legislation that will help our front-line physicians and community practices keep their doors open so that they can continue to provide necessary care for residents across the state. Physician practices have faced devastating reductions to revenues and increases in costs due to the COVID-19 pandemic, with 87% of practices reporting ongoing fiscal concerns.

CMA encourages support for conformity, as the deductibility of eligible expenses will both aid in keeping doors open and Californians employed. Without this change to California’s tax code, prior to the tax filing deadline, thousands of small businesses who needed a PPP loan to keep their doors open and their staff employed, would be hit with an unexpectedly large tax liability. Additionally, this change will help stem the fallout from the last year which could have a lasting impact on our state’s health care infrastructure and make it harder for many patients to receive the medical care they need when they need it.

Without this essential aid to physicians and providers, and other disproportionately affected industries, practice closures could reduce access to healthcare, crippling the state’s long-term recovery prospects. This bill maximizes the positive effect of the PPP loans, for those hardest hit, and ensures that struggling businesses and practices across the state can keep their doors open and continue to care for the members of our communities.

CMA is urging physicians to contact the governor and their legislators to urge immediate action to bring California’s tax treatment of PPP loans into conformity with federal tax laws. Click here to add your voice in support of AB 80 and in support of business and practices across the state. 


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