Paycheck Protection Program loan information

PPP loan forgiveness isn't included as book income

Report PPP loan forgiveness as book income on Schedule M-1

To enter book income not included on the tax return, go to the M1M2 screen in the
Balance Sheet
folder.
Use the
Book income not included on tax return
field in the
M-1 Book-Inc
section to enter information in the statement.
To also include this amount on Schedule K, line 18b, Other tax-exempt income, enter
I
(for Include) in the
Schedule K
column. If you want to exclude this amount, enter
X
.
To also include this amount in Schedule M-2, Net income (loss), enter
P
(for Permanent) in the
Tax Capital
column. If you want to exclude this amount, enter
T
(Temporary).

Report PPP loan forgiveness as book income on Schedule M-3

To enter book income not included on the tax return when you're preparing Schedule M-3, go to the M3-2 screen.
In the
Balance Sheet
folder, go to the
Income (Loss)
section and enter the reportable book amount in the
Income (Loss) per Income Statement
column.
Use the
Temporary Difference
and
Permanent Difference
columns to back out the income.
To also include this amount on Schedule K, line 18b, Other tax-exempt income, go to the
Schedule K
section and complete the
Other tax-exempt income
field.
To also include this amount in Schedule M-2, Net income (loss), go to the
Schedule K
section and enter
P
(Permanent) in the
Tax Capital
column of the
Other tax-exempt income statement
field. To exclude this amount, enter
T
(Temporary).

Include loan forgiveness as an increase in partner basis

To increase partner basis, go to the
Basis
screen.
Select
Partner Info, Basis
,
Inc & Dec
, then use the
Other increases
field to enter information in the statement.

Include required statements regarding PPP loans

Select
K-4
, then
Schedule K
.
Complete the following required information:
The partnership's name, address, and EIN.
The section(s) of Rev. Proc. 2021-48 the partnership is applying to. This can be 3.01 (1), (2), and/or (3).
The amount of tax-exempt income from forgiveness of the PPP loan that the partnership is treating as received or accrued during the year.
Whether forgiveness of the PPP loan was granted as of the date the return is filed.