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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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- Why does my critical diagnostic persist after I've created the PPP loan forgiveness statement for Rev. Proc. 2021-48?
Why does my critical diagnostic persist after I've created the PPP loan forgiveness statement for Rev. Proc. 2021-48?
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jodi
Level 1
02-11-2022
08:56 AM
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OldCPA
Level 3
02-11-2022
03:33 PM
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Do you have it entered for both years? I had the critical diagnostic in the 2021 software for 2020 until I completed the 2020 information. Not sure why it's asking for both years when my client got the PPP in 2020 and it was forgiven in 2020 but maybe the IRS wants to know for some reason.
Not sure if that is correct but I'm holding the return for another issue, maybe there will be an update.
accoun5
Level 4
07-13-2022
01:53 PM
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I think I know the answer to this. Screen 3.1 is not about the year the PPP loan was received. Lacerte looks to the year you are treating the PPP loan as tax exempt income. So, if you did not treat the PPP loan as tax exempt income on the 2020 return and you are treating it as forgiven and as tax exempt income on the 2021 return, I believe for the S Corp module, you need to put the input in screen 3.1 Misc and then in the "2021 Taxable Year section." If you entered the forgiven PPP in screen 13 "total PPP loan forgiven" in the 2021 tax year S corp module, then you have to enter the same amount in the screen 3.1 Misc and then in the "2021 Taxable Year section." So if you got a 2020 PPP loan and it was forgiven in 2021 and you reported it as tax exempt income in Lacerte in 2021, I believe you need to report it in screen 3.1 Misc and then in the "2021 Taxable Year section." If you don't, you will get a critical diagnostic ref 2056734.
