December 27th, it was signed into law that PPP is not taxable income and you can deduct the expense that it was used for. It is "double dipping" and it's ok. That's at the Federal level. If you are in a state that has state income tax, there may be a tax issue for you. I'm in Texas, we do not have state income tax. The CPA that I spoke with said we do need to include it as "other income" once it has been forgiven. On schedule K, line 16b, non taxable income, you put the forgiven amount as a code B. It will roll out on K1's split out per shareholder. The balance sheet, income statement, etc on 1120-S all balances out to your books.
