COVID-19 EIDL payments made with personal funds

[swimmersmom55]

I received a COVID-19 EIDL in 2020 and then my business ultimately folded. I am now making the payments with personal funds. Is the interest on the payments deductible on my 1040, and if so, where can I find the place to enter the information. 

[Cynthiad66]

Interest paid on a personal loan is not deductible.

However, if you are in business follow the steps below.

This is how to enter it in TurboTax:

1. Open you return, select Federal on the left side menu, then  Wages & Income.
2. Scroll down and find Self-employment income and expenses, select Start or Revisit to the right.
3. Answer the first question Yes.
4. Click Continue until you get to EXPENSES.
5. Click Add expenses for this work at the bottom of the expense summary.
6. Click on Less common expenses at the bottom of the list.
7. Check the box next to Credit card, loan, and other interest, click Continue. 
8. Click Start to the right of Credit card, loan, and other interest.
9. Enter "EIDL interest" as the description and the amount of interest that you paid.
10. Click Continue. 

[swimmersmom55]

As I said in the original post, it was an EIDL for a business that ultimately folded. However, even though the loan is still in the business name (which doesn't exist anymore) and it could not be forgiven, I am still the guarantor so I am paying off the loan with personal funds. Is the interest deductible anywhere on my personal return, since I haven't had a business tax return since I went out of business?

[ThomasM125]

No, the interest is no longer deductible since you don't have the business anymore. To be deductible, an expense needs to be ordinary and necessary for the production of business income. Since there is no business income being generated, the interest expense is not deductible.