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    PPP forgivable loan to S corp.

    S corp has received the PPP loan and its is forgivable, and nontaxable income, How do I account it in the book ? Thank you for reply in advance.

    #2
    Originally posted by HRS View Post
    S corp has received the PPP loan and its is forgivable, and nontaxable income, How do I account it in the book ? Thank you for reply in advance.
    Dr. PPP Loan Payable xxx.xx
    Cr. Other Income:Nontaxable PPP Loan Forgiveness xxx.xx
    To record forgiveness of PPP loan.

    And then (at least under the IRS's current interpretation):

    Dr. Other Expenses:Nondeductible PPP Loan Expenses xxx.xx
    Cr. Salaries & Wages xxx.xx
    To record non-deductible expenses per IRS notice 2020-32.

    I suspect that many folks will just use a contra-expense account to reduce the overall expenses for tax purposes, rather than adjust salaries & wages directly.

    Rick

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      #3
      Thank you rbynaker -Rick for prompt reply, so the following entry will be Balance Sheet item and the 2nd part will be Profit & Loss item ?

      1.
      Dr. PPP Loan Payable xxx.xx
      Cr. Other Income:Nontaxable PPP Loan Forgiveness xxx.xx
      To record forgiveness of PPP loan.

      2. Dr. Other Expenses:Nondeductible PPP Loan Expenses xxx.xx
      Cr. Salaries & Wages xxx.xx
      To record non-deductible expenses per IRS notice 2020-32.

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