It is correct. Since both PPP loans were forgiven in 2021, both should be reported as non-taxable income.
However, there is a known issue with the Step-by-Step completing the M-1 correctly and we are working to resolve this. There is a workaround for this so you do not have to delay filing your return.
Please follow these steps:
- 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 total dollar amount of both loans 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 2021 PPP loan only.
- On the left, click PPP Loan Stmt
- Scroll to the bottom of the page and respond to the questions on the Smart worksheet listing both loans as 1 total amount forgiven in 2021.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
