Sign Up

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
cancel
Showing results for 
Search instead for 
Did you mean: 
macrorepublic
Returning Member

Reporting EIDL Loan (not grant) on 1120-S

I received a $150,000 EIDL Loan from the SBA for the S-Corp. Does anyone know where to report this amount on Form 1120-S?

7 Replies
ThomasM125
Employee Tax Expert

Reporting EIDL Loan (not grant) on 1120-S

If you think the PPP loan will be forgiven, then you won't report it as taxable income in TurboTax. You would report it on line 16(a) of Schedule K as Other Tax-Exempt Income if you are filing a form 1120-S. It would appear on your financial statement as either loan payable or other income, so there may be a reconciliation issue if you report your balance sheet on your tax return. This may be aided by the entries in Schedule M-1 and M-2 in TurboTax and on your corporate income tax return.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
macrorepublic
Returning Member

Reporting EIDL Loan (not grant) on 1120-S

This is pertaining to the EIDL Loan, not PPP Loan. Should I treat the EIDL Loan the same as PPP Loan and report the EIDL Loan amount on line 16(a) too?

DanielV01
Employee Tax Expert

Reporting EIDL Loan (not grant) on 1120-S

The EIDL loan (which you will pay back), will not be reported in Box 16a because it is not income.  It is, rather a company liability which increases your basis in the company.  Interest payments on the loan will be business expenses, whereas payments towards the principal will reduce the liability and your corresponding basis.

 

The PPP loan should also be reported as a company liability until the year it is forgiven.  Then it becomes nontaxable income as @ThomasM125 mentions above.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
LLC13
Level 1

Reporting EIDL Loan (not grant) on 1120-S

Thank you @DanielV01 ! But where do I enter it in TurboTax? Or on form 1120-S?

LLC13
Level 1

Reporting EIDL Loan (not grant) on 1120-S

I would like to know where to enter the EIDL loan amount in TT  (to obtain the 1120-S), did you figure that out? Did not quite understand the answer you received.

Thanks!

DanielV01
Employee Tax Expert

Reporting EIDL Loan (not grant) on 1120-S

@LLC13 If you are trying to use TurboTax to file the 1120-S then you should be using TurboTax Business to do so.  This loan is an item that affects shareholder basis, but nothing else (directly).  Because it affects shareholder basis, it is also a balance sheet item if you need to maintain a balance sheet (which I recommend you do even if it is not required).  I will admit that I am not super-familiar with TurboTax Business entries, but what you are looking for is a category associated with "Items that affect Shareholder Basis".  A loan is a debt basis that has the effect of increasing shareholder basis (since the proceeds of the loan are included into corporate assets, such as cash on hand).  As the loan is repaid, the interest figures will be considered business expenses, but payback on principal will have the effect of reducing the shareholder basis.  Since the loan is not income, paying back the loan is not a company expense, but paying interest on the loan is a company expense.

 

In any version of TurboTax for personal returns, the company loan itself is not an item that will be entered directly into the return.  However, if you need to provide your shareholder basis as part of your return (which is likely), then the information regarding the loan as expressed in your K-1 and Basis worksheets will be included in the return.  This information helps the IRS determine if any distributions you receive are taxable, or if you are reporting a loss, whether or not you will be able to claim the loss.

 

I'm sorry I can't provide better navigational directions for TurboTax Business, but I hope this is helpful.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
LLC13
Level 1

Reporting EIDL Loan (not grant) on 1120-S

@DanielV01 Thanks very much! Yes, I am using TT business.

Dynamic AdsDynamic Ads
Privacy Settings
v