Yes, you need to report the forgiven PPP loan proceeds as non-taxable income on your schedules, but the step-by-step process creates a known issue in TurboTax.
You can follow these steps to work around this and not delay filing your return:
- In Step-by-step mode, under Business Info click the About Your Business tab
- Click Continue until you get to the Forgiven PPP Loan page and answer No.
- Switch to forms mode, click on Sch M-1 Wks.
- Under Other permanent income items add the description "PPP loan forgiveness" and the dollar amount in the Per Books column.
- Scroll down to Other permanent expense items, list the description "PPP funded expenses" and enter the amount of covered expenses for your PPP loan.
- On the left, click PPP Loan Stmt
- Scroll to the bottom of the page and respond to the questions on the Smart worksheet
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