PPP statement

[11Buster]

According to 2021 form 1040 instructions, page 23, a taxpayer is now required to attach a statement to the tax return in regards to receiving a PPP loan in either 2020 or 2021 under Rev. Proc. 2021-48.  Does anyone know what screen to enter this on, before calling Lacerte.  Maybe it will be in a later update?

[sjrcpa]

"Maybe it will be in a later update?" Maybe. I hope so.

But if you're gung ho now you can always make a Statement in Notes.

[11Buster]

Per a call to Lacerte just now, representative did not have an answer.

[sjrcpa]

I'm not surprised.

[BobKamman]

Here are those instructions.  IRS has hired an army of older men wearing green eyeshades, to read each statement:

Forgiveness of Paycheck
Protection Program (PPP)
Loans
The forgiveness of a PPP Loan creates
tax-exempt income, so although you
don't need to report the income from the
forgiveness of your PPP Loan on Form
1040 or 1040-SR, you do need to report
certain information related to your PPP
Loan.
Rev. Proc. 2021-48, 2021-49 I.R.B.
835, permits taxpayers to treat tax-exempt income resulting from the forgiveness of a PPP Loan as received or accrued: (1) as, and to the extent that, eligible expenses are paid or incurred; (2)
when you apply for forgiveness of the
PPP Loan; or (3) when forgiveness of
the PPP Loan is granted. If you have
tax-exempt income resulting from the
forgiveness of a PPP Loan, attach a
statement to your return reporting each
taxable year for which you are applying
Rev. Proc. 2021-48, and which section
of Rev. Proc. 2021-48 you are applying—either section 3.01(1), (2), or (3).
Any statement should include the following information for each PPP Loan:
1. Your name, address, and ITIN or
SSN;
2. A statement that you are applying
or applied section 3.01(1), (2), or (3) of
Rev. Proc. 2021-48, and for what taxable year (2020 or 2021) as applicable;
3. The amount of tax-exempt income from forgiveness of the PPP Loan
that you are treating as received or accrued and for what taxable year (2020 or
2021); and
4. Whether forgiveness of the PPP
Loan has been granted as of the date you
file your return.
Write “RP2021-48” at the top of your
attached statement.

[11Buster]

Yes, we will just have to wait to see if Lacerte supplies the statement, as I have been mentioning or if preparers will have to create their own.  

[harveyburger]

The instructions for the 1120S want not only the PPP loan to be reported on the M2 in the OAA which is column D but they want all the associated expenses reported in the OAA column also which means that the expenses are reported in two places on the M-2.

I wonder if the IRS wants us to file an amended tax return for 2020?

[PhoebeRoberts]

Just correct the OAA balance on the 2021 return.

https://www.currentfederaltaxdevelopments.com/blog/2022/1/3/irs-draft-2021-s-return-instructions-pro...

[sjrcpa]

That's my plan.

[11Buster]

The AAA adjustment is unique to the 1120S as I believe it is non-applicable for partnerships/C corporation, however it also doesn't appear that these entity types are required to attach the same statements as both individual (businesses) and S corporation per the respective instruction(s) for each:

Attach a statement to the S corporation {1040} return for each tax year in
which the S corporation is applying Rev. Proc. 2021-48. Any thoughts?

[TaxGirl3]

Lacerte now supplies the statement.  In the section where you enter the PPP Forgiveness income (Sched  C, E, etc.) there's a "Required PPP Loan Forgiveness Statement” 'button' that takes you to the miscellaneous section on screen 3 to enter the statement info.  Also, it looks like the Scorp module correctly reports the forgiveness in column d of the M-2.

[TaxGirl3]

1065 and 1120 instructions do seem to require statements attachments related to Rev. Proc. 2021-48.  Perhaps you were looking at an earlier version of the instructions?