This is technically what should have occurred:
- I believe you have some years referenced incorrectly?
- Forgiven in October 2022?
- But back to basics
- In the year of receipt your should have a DR to cash and a CR for PPP Loan
- Then as the funds were used DR Expense (wages most likely) and a CR to cash
- Then when the loan was forgiven DR to PPP Loan and a CR to Income
- The last entry would have eliminated the loan from the balance sheet and would have recorded income on QB.
- Then when you prepared the tax return in TT, you appropriately had an M-1 for income on the books (QB) and not on the return.
- Going forward everything should be good.
- Possibly when 2022 was prepared the M-1 was reflected as a timing difference instead of a permanent difference? As a result, TT is "thinking" there should be a reversal.
- However, there will be no reversal since this is a permanent difference.
*A reminder that posts in a forum such as this do not constitute tax advice.
Also keep in mind the date of replies, as tax law changes.
