eidl grant

Forum|Forum|5 years ago
February 12, 2021
21 replies
159 views

how does the 2020 business software handle the eidl grants

TurboTax Business Windows

KathrynG3

Alumni - Intuit

Nothing specific needs to be done regarding your EIDL Grant/Advance. It is non-taxable income.

For Schedule C income, there is no need to report it.

If you are reporting income from Schedule K-1, it will be reported when completing the business return on Schedule K as non-taxable income, as well. Enter the Schedule K-1 as received.

For more information about EIDL Grants/Advances, see: SBA Economic Injury Disaster Loans

JPM_CA

Level 2

It's non-taxable for the federal return, but it is taxable in states (Specifically California).

I marked it as non-taxable in Quickbooks; TurboTax State asked whether there was an EIDL Grant (answered yes) and now there is a balance sheet mismatch in TurboTax for the State return.

Any clues gratefully accepted.

JoannaB2

Alumni - Intuit

The PPP loan is exempt from Federal taxation and to most states. California, for one, conforms to Federal taxation and therefore, PPP loan is non-taxable For taxable years beginning on or after January 1, 2020, California provides an exclusion from gross income for covered loan amounts forgiven under the federal CARES Act, Paycheck Protection Program and Health Care Enhancement Act, or the Paycheck Protection Program Flexibility Act of 2020.

See, ftb 2019-2020 legislation, link.

Abe7

Level 2

Here's a hypothetical scenario hopefully someone can answer.

You have 10,000 in normal income for you business and 5000 in EIDL grant received. You have a total of 15000 in expenses which includes expenses paid using the grant money. Since the IRS is not taxing the EIDL grant, it will not be reported as taxable income. However, since the expenses paid using the EIDL grant are deductible, 1120S will essentially show a loss correct? Because they are only seeing 10,000 in taxable income minus the 15,000 in total expenses deducted. The 5,000 EIDL grant has no say in this part.

Would that be correct? This should technically show a loss on 1120S? Which will be passed down to the shareholders.

JPM_CA

Level 2

It sounds right to me, but I'm no IRS wiz. [However: If you're in CA, there's no loss on the state tax because the grant is taxable and counts as income.]