PPP Loan forgiveness

[jprince1]

Hi

I had a PPP loan in 2020 that was in process of being forgiven but it was not fully forgiven in 2021 but this happened after I filed my 2020 1120S . I entered all the loans under tax exempt income on line 16 on my 2020 1120S. I also had a second PPP loan in 2021 that was fully forgiven. My question is where do I enter the forgiven amount of the loans from 2020 and 2021 and how do I enter the loan payments I am making on the unforgiven amount?

[ThomasM125 · Accepted solution]

The loan from 2020 was not forgiven evidently, but it is not taxable income since it is just a loan. Consequently, you don't necessarily need to amend your return for 2020 since your taxable income did not change. You can amend it if you want to change the amount of the tax-exempt income reported on line 16(b). You don't need to report it in 2021, since it won't affect this year.

For the PPP grant in 2021, you enter it the same way you did in 2020, on line 16(b) on your form 1120-S, schedule K.

The loan payments are not entered on your income tax return, since they aren't deductible, but you can enter the interest expense associated with them on line 13 of the first page of form 1120-S.

[jprince1]

Thank you so much. Only question is do I include the loan payments on the other deductions line 19 on the 1120S? Do include them on the statement? I think you are saying I do not . I don't file a balance sheet

[ThomasM125]

No, the loan payments are not deductible, so you don't report them!