eidl grant

[JPM_CA]

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.]

[JamesG1]

@Abe7

Correct, on the 1120S, income of $10,000 - expenses of $15,000 = loss of $5,000.

On an 1120S, report the $5,000 as non-taxable income on line 16(b).  It will be reported as a reconciliation item on the M-1 Worksheet.

This article states:

EIDL Advances Are Not Taxable; Expenses Paid Are Deductible

The new stimulus law provides that the EIDL advances are not taxable income. And otherwise deductible business expenses paid with EIDL advances are tax-deductible.

[Jasminsreichle12]

As self employed individual, how do i fulfill EIDL grant reporting for California purposes in Turbo tax? Obviously the grant ($1000) is non-taxable, therefore not an addition/deduction from the federal return, where the EIDL isn’t prompted. However the corresponding prompts in TurboTax under state would treat it as add/ded. Is it really enough to add it to form 4197 without amounts and file? 

by the way my grant was issued in 2020 but I didn’t report it then bc I couldn’t find it in TT. 

[DaveF1006]

Normally, the EIDL loan is not considered as income and is not taxable. You do not need to enter it on your federal tax return but California seems to want the form 4197 filled out. There doesn't seem to be a lot of verifiable information out there but I did find this. I posted this in your other post also.

Yes, here is an explanation from the on-demand tax guidance in turbo Tax regarding form 4197. 

1. Reporting Requirements - For taxable years beginning on or after January 1, 2021, taxpayers who benefited from the exclusion from gross income for the PPP loans forgiveness, other loan forgiveness, or the EIDL advance grant and related eligible expense deductions under the federal CARES Act, Paycheck Protection Program and Health Care Enhancement Act, Paycheck Protection Program Flexibility Act of 2020, or the CAA, 2021, should file form FTB 4197, Information on Tax Expenditure Items, as part of Franchise Tax Board's (FTB) annual reporting requirement.

Note: For taxpayers that benefited only from the PPP, other loan forgiveness, or EIDL program, complete only Part I, column (a); do not complete the rest of the form.

If you personally benefitted from this in the matter prescribed above, then you need to include the 4197 in your California State return.  Here is the direct method of accessing that form in your program.

• If using the desktop software program, go to the forms mode in your Turbo Tax program
• Go to California Individual in the forms menu section in the the left pane of your program
• Select open form at the top
• Select the plus sign for California
• Scroll down to form 4197, select it to add.

@Jasminsreichle12

[ Edited 03/21/22|07:54 AM PST]

[Jasminsreichle12]

Thank you! So that means, the amount does not need to be disclosed? Do you know how to add EIDL and PPP both if using the online version? It seems like i can only do one or the other. 

[RobertB4444]

@jasminreichle12  If your EIDL grant was issued to you in 2020 as you said then you do not have a reporting requirement.  You do not need to report it on your 2021 return at all - in fact, you'll most likely confuse California if you do.

[confusedabouttaxes23]

Do I have to enter eidl twice as I got the targeted advance and the supplemental advance? Plus the online only let's me enter ppp but I got both

@RobertB4444