I need clarification re: my forgiven PPP Loan. 1 source says I can deduct expenses on my Schedule C paid for with the PPP,

[J888]

PPP covered office rent and payroll for myself (self-employed-no employees.)

[J888]

sorry--to clarify--1 source said I can deduct Schedule C expenses like office rent, even though it was paid by by the PPP.  This same source says I do not need to declare the part of the PPP used for payroll.  (income for myself as a self-employed person--no employees)  Another source said I cannot deduct the rent, etc.

[ThomasM125]

You can deduct all of the expenses paid from the PPP grant money. Originally, the IRS was not going the let those expenses be deductible, but that was changed early on in the tax filing season. You do not need to add the PPP money to your income on your tax return.

Money paid to yourself is not deductible, unless you report it on a W-2 form, in which case you will add that income onto your tax return as wage income.

[Critter-3]

A sole prop filing a Sch C  can NEVER EVER  pay themselves wages reported on a W-2 so no sole prop should ever issue a W-2 with their name as the employee.  

[J888]

Thanks for your response.  Interestingly--while I can't remember the exact wording--according to Turbo Tax prompts, I had to declare the part of the PPP I used for 'payroll income,' (self-employed, so to myself) in my State tax return.  An additional fee calculated which was a bummer. 

Meanwhile, I see now on my State website that I shouldn't have had to declare the PPP amount.  Hopefully it will all process seamlessly.  ***I wonder if someone from Turbotax could contact me directly, as I think the prompt and calculation were in error.*** I'm concerned about whether I should amend my return.

[J888]

I just checked my return--and the Turbo Tax generated Form was: "Schedule X--Fees and Other 5% Income Statement" and it populated with "Income from PPP Loan Forgiveness"  but on my state's tax website it says:

*****

"I report my business income on a personal income tax return. Is my forgiven PPP loan taxable?

No, forgiven PPP loans are not taxable for personal income taxpayers, including unincorporated businesses reporting income and expenses on Schedule C, partners in a partnership, and individual shareholders of an S corporation. Recently passed legislation excludes PPP loan forgiveness from gross income for 2020 for taxpayers subject to personal income tax. Therefore, personal income taxpayers do not need to report these amounts."

**Could someone from TurboTax please respond about this error, and give guidance on what I should do now that my return has been filed incorrectly due to TurboTax incorrect prompts.**

Thank you