; and (B) the lender shall not be subject to any penalties by the Administrator relating to loan forgiveness for the expenses. (8) Treatment of forgiven amounts (A) In general Section 108(a)(1) of the Internal Revenue Code of 1986 is amended by striking or at the end of subparagraph (D), by striking the period at the end of subparagraph (E)(ii) and inserting , or , and by adding at the end the following new subparagraph: (F) the indebtedness discharged is a covered loan (as defined in section 2(a) of the RESTART Act) discharged under section 2(j) of such Act. . (B) Reduction of tax attributes Section 108(b)(1) of such Code is amended by striking or (C) and inserting , (C), or (F) (after application of subsection (j)(i)) . (C) Limitation Section 108 of such Code is amended by adding at the end the following new subsection: (j) Special rules for discharges of covered loans (1) Inclusion of excess amounts (A) In general In the case of any taxpayer to which subsection (a)(1)(F) applies, the gross income of such taxpayer for any taxable year in the applicable period shall be increased by the product of— (i) 20 percent, and (ii) so much of the amount excluded under subsection (a)(1)(F) as exceeds $250,000. (B) Applicable period For purposes of subparagraph (A), the term applicable period means the 5 taxable-year period beginning with the taxable year in which the discharge occurs. (2) Application to tax attributes For purposes of applying subsection (b), the amount taken into account as excluded from income under subsection (a)(1)(F) shall not exceed $250,000. . (D) Effective date The amendments made by this paragraph shall apply to discharges of indebtedness after the date of the enactment of this Act. (9) Coordination with employee retention tax credit Section 2301(g) of the CARES Act ( Public Law 116–136 ) is amended to read as follows: (g) Election To not take certain wages into account (1) In general This section shall not apply to qualified wages paid by an eligible employer with respect to which such employer