Is the EIDL Advance (grant) considered taxable income?

[nubbss]

Is the EIDL Advance grant considered taxable income in North Carolina?

[ErnieS0]

No an EIDL grant is not taxable in North Carolina @nubbss.

Refer to Important Notice: Impact of Session Law 2021-180 on North Carolina Individual and Corporate Income Tax Returns

[nubbss]

Thank you for the information

[raperr4]

I have a TT Partnership LLC return and just about complete.  The EIDL Grant received by my daughter is tax exempt and forgiven.  Your comment last year was to acknowledge Tax exempt and not does not need to be placed on the tax return.  Is this still correct and appears all the community states this to be true?

I am still concerned that there is a place to enter "tax exempt" on the 1065 but I may run into too many questions. Cannot locate any TAX EXEMPT on the 1065. raperr4

[AliciaP1]

The EIDL loan is not considered as income and is not taxable. You do not need to enter it on your tax return. 

The Community also discusses PPP loans that are forgiven and are not taxable but are required to be reported on Form 1065 and 1120S.

@raperr4

[nubbss]

Since the EIDL Advance grant is not taxable, does it need to be listed on my tax return this year?

[JohnW152]

No, it doesn’t.
@nubbss
 

[nubbss]

Thank you

[Jasminsreichle12]

self employed contractor here. I received an EIDL advance in 2020 which I did not report on the 2020 federal nor state tax, because there was no prompt to do so in turbo tax. Does it need to be added on the California federal (per previous dialogue not) and state tax return 2021? If so, how do I do that? I already added my ppp loan + forgiveness 2021 information, and I do not seem to be able to add/report both eidl and ppp on form 4197. 

[PatriciaV]

As AliciaP1 stated above: "The EIDL loan is not considered as income and is not taxable. You do not need to enter it on your tax return " This was true for 2020 and remains accurate for 2021.

[Jasminsreichle12]

Understood. What about the California portion? Same thing?

there is now an item called ‚Emergency Financial Aid Grants‘ - „The CARES act allows an exclusion from gross income for emergency financial aid grants. California does not conform to this federal provision. Only enter amounts you excluded from your federal return.“ Here, I‘d like to think my $1000 would make sense? 

[Jasminsreichle12]

However, it appears to be an incorrect statement because as you mentioned and per my readings on the topic, California does, indeed, conform

[chastity_lashure]

Thank you for the quick and concise answer. 

[MPower0505]

But does the employee need to claim (as earn income) any parts of their salary that came from an EIDL? 

[GeorgeM777]

No, initially, advance funds were supposed to be taxed. But the Consolidated Appropriations Act, enacted in December 2020, reversed that decision.  Thus, business owners do not have to report these forgivable funds as taxable income.

@MPower0505