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How is EIDL Advance reported on 1120S?

Forum|Forum|5 years ago
December 6, 2020
4 replies
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The EIDL Advance is a grant that does not have to be repaid. On the 1120S, is it reported on Line 5, Other Income? or does it go somewhere else?

TurboTax Business Windows

Best answer by ThomasM125

You need to go into the Forms mode to make the entry. You will see an icon for it on the top right of your menu bar in TurboTax. When you see the list of forms on the left side of your menu bar, choose Form 1120S p3-5 and then you will find line 16(b) on page 4.

@bill334

Critter-3

As far as I know at this time ... you will NOT report the grant on the return since it is NOT income AND the expenses paid with that forgiven loan / grant are also not entered on the return ... https://home.treasury.gov/news/press-releases/sm1187

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bill334Author

The link you posted applies to PPP. I am asking about the EIDL advance. Any advice on that?

Critter-3

The EIDL is a LOAN ... NOT INCOME so you do not report it as income. The interest paid on the loan is a deductible expense just like if you used a credit card or line of credit to pay expenses.

https://www.sba.gov/sites/default/files/2020-09/COVID%20EIDL%20FAQ%20rev%20092120-508.pdf

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AmeliesUncle

Yes, the EIDL grant (the amount that does not need to be repaid) is entered as income on the tax return. "Other" income is an appropriate place to put it.

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susanmcturbo

Is the EIDL advance considered to be taxable? If not, where do I enter that amount in TurboTax?

I did not receive the loan, but I did receive an EIDL advance, which is a grant that does not have to be repaid.

I used it for business expenses.

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UCguy

I have the same question as well. Some replies said the Grant should be put under "other income" since it taxable income but some said need not to report. I am so confused. Can the tax adviser from TurboTax give us a clear answer, please?

Thanks

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AmeliesUncle

They changed the law a few weeks ago. The new law says the forgiven amount from a EID loan is NOT taxable income, so it does NOT need to be reported as taxable income. But in order for it to affect the Basis box on the K-1, you need to enter it as tax-exempt income [edited].

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bill334Author

It seems to me the EIDL Advance (which is not a loan; does not need to be repaid) affects shareholder basis and so should be reported on line 16b (other tax-exempt income).

I have gone completely through the TurboTax questionnaire and it never gave me an opportunity to enter this information.

Can you explain how, exactly, i enter this in TurboTax?

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ThomasM125Answer

You need to go into the Forms mode to make the entry. You will see an icon for it on the top right of your menu bar in TurboTax. When you see the list of forms on the left side of your menu bar, choose Form 1120S p3-5 and then you will find line 16(b) on page 4.

@bill334

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