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Returning Member
posted Feb 2, 2023 1:56:40 PM

EIDL Covid loan interest

My S-Corp received an EIDL Covid relief loan from the SBA early in the pandemic.  Although payments on the loan were deferred until December of 2022, interest has accrued and been added to loan balance.  I have two questions.  First, are the initial payments I make applied 100% towards the accumulated interest until that has been paid off?  Or will the payment be divided between principal and interest?  Second question: will I receive a 1099-int statement for year-end 2022? 

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1 Replies
Expert Alumni
Feb 2, 2023 2:47:22 PM

All of your payments will be applied to the principal and interest according to the payment schedule for your loan.  You will not receive a 1099-INT as this form reports interest paid to you by a financial institution.  You are able to deduct the interest portion of your EIDL payments as "Interest Expense" on your business tax return.

 

See SBA Capital Access Financial System to log into your account and manage/view your balance and payments including interest paid.