ThomasM125
Expert Alumni

Business & farm

@mcd8  What may have happen is your beginning retained earnings on line 1 of schedule M-2 was taken from your prior year tax return which was less than what was on your books since the PPP income increased it for book purposes but not for tax purposes.

 

To correct it, you may need to add the income to retained earnings on schedule M-2 by making an entry under line 3 (Other increases.)  That will increase your retained earnings on your balance sheet and that may bring it into balance.

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