So how do I report the adjustment for State and Local grant money received by the S-Corp? It is included in federal taxable income, but it is not taxable for MD. So it needs to show on the MD K-1 as a subtraction. To get the subtraction to carry to the MD K-1, I have entered the information in the appropriate fields in Lacerte (screen 44.271) in the 500LU section for "Coronavirus relief grant payment or loan forgiveness". This entry generates the critical diagnostic that the 500LU is not available. 

If you have a "work-around", please share. I'd very much like to get these MD PTE returns filed.

Thanks!