Error: Schedule M-1 Items Worksheet: Book-TxExmpt In-OutState

If you are correctly reporting amounts from forgiveness of a PPP loan to your business you will have information on line 16b.  There must also be an accidental entry for tax-exempt interest income under Investment Income.

To check this amount please:

1. Under the Federal Taxes tab in TurboTax Business, click Update next to Interest and dividend income under "Investment Income".
2. Click Continue past the Enter Taxable Interest Income page.
3. Click Continue past the U.S. Obligation Interest income page,
4. Clear any amounts that may be in the boxes on the Tax-Exempt Interest page and click Continue.

If there are amounts that are supposed to be under Tax-Exempt Interest as they were reported to the business, then you will need to choose to "complete my balance sheet" under the balance sheet section.

I use TurboTax Business desktop edition for my S Corp and I'm coming across the exact issue. Did anyone find a solution?

Finally was able to submit it. 

Had to create a new file: 

1. PPP Section say No 

2. Go to Forms 1120 pg3-5, M-1 Enter PPP Forgiven $Amount

3. Finish the Income & deduction sections. Do not enter anything for the Interest Income in my case. 

4. Go back to PPP Section say Yes and enter the PPP Forgiven $Amount

5. Check for Errors, Save and submit

I didn't wanted to take any chance, and so I bought $60 Audit Defense. 

I will try the suggestions to fix M1 problem

Scorp revenues are less than $250000 but TurboTax will not allow the schedule M1 to be deleted   I do not want to file the M1. Help.