Small business owners with certain forgiven federal loans during the COVID-19 pandemic can now exclude those funds from their gross taxable income in Massachusetts.

Gov. Charlie Baker signed into law Thursday afternoon legislation that makes enables “pass-through entities” with forgiven Paycheck Protection Program loans to get the same tax benefits that corporations do.

The congressional stimulus package in December allowed businesses with forgiven PPP loans to exclude the funds from gross taxable income while still claiming the deductions for expenses they paid using the PPP money, which tax experts and critics have described as a “double benefit.”

In Massachusetts, corporations got the same benefits because the state’s corporate tax code conforms to the federal corporate tax code automatically. But the state has a fixed individual tax code, meaning lawmakers had to pass legislation to ensure small businesses could get the same relief.

Residents who received unemployment benefits won’t be taxed on the first $10,200 if they live below 200% of the federal poverty level.

The new law also freezes the unemployment insurance rate for the calendar years 2021 and 2022, slowing the annual employer UI contribution rate. The rate was expected to increase hundreds of dollars per employee.

“This legislation takes a thoughtful and comprehensive approach in delivering critical relief to facilitate economic recovery for the people of Massachusetts,” Baker said in a letter to lawmakers.

While employers get a reprieve from UI rate hikes, the new law authorizes the state to issue special obligation bonds to repay federal advances and get the trust fund out of the red.

The bill also creates a $75 million COVID-19 emergency paid sick time program similar to the federal COVID leave benefits, requiring employers to give workers a week’s paid leave if they are infected with, isolated or quarantined due to COVID-19.

The paid leave also extends to those getting vaccinated or caring for family members who fit those same criteria.

“The mandate aptly addresses needs — immunization, isolation, and quarantine — that were not contemplated when the state’s Paid Family and Medical Leave program was designed,” Baker said.

Baker sent back two amendments that would tweak the state’s paid sick time program.

The first would require that employees on sick leave related to COVID-19 get no less than their regular rate of pay. The amendment would cap the sick pay at $850 or two-thirds of the regular rate of pay for family leave.

The program would offer benefits to part-time employees with “a regular schedule with consistent hours per week” as long as the paid sick leave is equal to the number of hours an employee works per week, on average over a two-week schedule.

The second amendment would extend a $40-per-employee tax credit to employers who lack access to the tax credit under the federal leave program. Extending the tax credit for all employees who aren’t covered, Baker said, would make it easier for employers to request the credit to the Executive Office of Administration and Finance without the risk of potentially having to rely on paperwork that could violate health private laws.

An employer would have to file the credit application and any amendment related to the application by Dec. 31.

This amendment would also set an end date of Sept. 30 for the COVID-19 emergency paid sick time program. Baker said setting an official deadline would address any uncertainty between employers and workers because the sick leave program’s end date would otherwise be whenever the $75 million fund dries up.