Economic injury disaster loan (EIDL) advances would normally be taxable. However, since they are associated with the payroll protection program (PPP) loans which are clearly not taxable, it seems likely that they are not taxable as well. However, it is hard to find direct substantiation of this in IRS regulations.
Assuming they are not taxable, you would not enter the EIDL advance as income on your tax return. There are typically differences between income reported on your company income statement and the income reported on your company tax return. So, your balance sheet as listed on your tax return will not necessarily tie into your income listed on the return. You reconcile the two on schedule M-1 on your form 1120 or 1120-S, corporate income tax return.
Assuming you used the loan or advance proceeds for qualifying expenses, the expenses would be deductible.
Coronavirus Tax Relief and Economic Impact Payments | Internal Revenue Service (irs.gov)
Eligible Paycheck Protection Program expenses now deductible | Internal Revenue Service (irs.gov)
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