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See what's trending for the November 15th deadline (Form 990) and resources for the upcoming tax season. View Lacerte Hot Topics.
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- SBA 7(a) Loan Subsidy Payments - taxable to CA and CA M-2 question
SBA 7(a) Loan Subsidy Payments - taxable to CA and CA M-2 question
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mhkdgal
Level 4
02-26-2022
05:00 PM
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The SBA paid 6 months worth of loan payments on an SBA 7(a) loan as part of the CARES Act in 2020. Client is just now filing 2020 S-Corp tax return.
I reported the loan subsidy payments as tax-exempt income on the federal return in Lacerte on Screen 13 as "EIDL advance (grant), as well as other assistance addressed by the CAA Section 278 (non-taxable for federal, taxable in some states."
This amount is taxable for CA, so I entered a CA adjustment on Screen 44 in "Taxable SBA and other loans/grants."
This amount is showing up on my CA M-2 in the Other Adjustments Account on line 3 as an "Other Addition". Since it is not considered tax-exempt income for CA, I did not expect to see this in my Other Adjustments Account for CA at all. What am I missing?
Thank you!
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