Yes, you are correct that the PPP loan does not get reported on the tax return. It does need to be on the books as non-taxable income in the year that it is forgiven.
Back in December 2020, the Congress retroactively allowed PPP related expenses to be deducted. Please include all payroll expenses in your deductions. And by doing that, they will match the W-2s issued.
The Advance/Grant portion of the EIDL is not reported as taxable business income on your tax return. EIDL is not owner contribution but a non-taxable income. If the grant was given to a partnership or a corporation, the grant will increase owner's capital account.
