@pflipper THANK YOU! This is what finally solved my problem. No one, not even a so-called "expert" at TurboTax understood this issue. He just plunked around on the return for over an hour not being able to figure out how to fix it. And yet, now that I understand it, it seems so simple:
If you have non-taxable income (EIDL Grant, Forgiven PPP Funds, Non-taxable Credit Card Rewards money, etc), DON'T enter it anywhere as income on the return. ONLY enter as "non-taxable income" on the M-1 (which you have to access through the Forms function). Then, the K-1s and Schedule M-2 will populate automatically with the appropriate info. This brought my Balance Sheet and Retained Earnings into balance. Hallellujah!
Everyone kept saying these items shouldn't be entered as Income, but no one explained where it actually should be entered so that it would still be accounted for and allow for the Balance Sheet, etc to match up.
Thank you for saving my day!
And, side note to Turbo Tax! You need to address this in the Step-by-Step part of the app. I shouldn't have to be that level of an expert to be able to properly deal with a problem that MOST small business owners are dealing with, especially in 2020 and beyond. Just ask about non-taxable income items and enter them in the M-1, M-2 and K-1, automatically. I thought the program was supposed to be helpful!
