Yes, it appears the PPP loan you received is taxable on your CA return. However, when you say that you received your PPP loan during the non-conforming period, do you mean you received your PPP loan after March 31, 2021 to June 30, 2021? If yes, then you are correct in that California does not allow an exclusion from gross income for PPP loans forgiven due to the extended covered period after March 31, 2021 to June 30, 2021. While you may be an eligible entity under CA law, meaning you are not, among other things, a publicly traded company, CA modified forgiveness of PPP loans. In this regard, CA did not allow the exclusion from income of forgiven PPP loans received after March 31, 2021 to June 30, 2021.
If you excluded the amount from gross income for federal purposes, then this excluded amount will be entered on line 3, column C of Form 540.
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