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    #1

    1099-Misc

    S-Corp has a SBA loan in 2020 for which SBA made six payments of principal and interest due to COVID. The second stimulus enacted December 27, 2020 amended the CARES Act to provide that the SBA's payments of principal and interest made on behalf of the borrower were not taxable income to borrower. Bank that handles loan submitted a 1099-Misc reflecting the loan payments as "other income" in Box 3, .. Being the payments are non-taxable, should a 1099-Misc be issued?

    Peggy Sioux
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    #2
    Record it as Tax Exempt Interest, which will create an M-1. TEI is reported on tax documents. It increases the basis,

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