PPP on S-Corp returns

Forum|Forum|4 years ago
January 31, 2022
3 replies
17 views

Anyone have a solution to the "other exempt income" increase to the M-2 other adjustments account. the only way we can get the PPP $$$ to the M-2 Other adjustment is by reporting the $$$ as tax exempt interest income and not other exempt income.

ProSeries Professional

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Samantha_at_Intuit

Level 3

If you have made the selection to use the automated Schedule M-2/Retained Earnings Worksheet amounts, then you must also use the Schedule M-1 Items Worksheet. In this case, the tax-exempt income from the forgiveness of a PPP loan can be entered as an "Other permanent income item" on the Schedule M-1 Items Worksheet, which will then flow to the Other adjustments account on Schedule M-2 as an addition. Alternatively, if you have made the selection to not use the automated Schedule M-2/Retained Earnings Worksheet amounts, then Schedule M-2 is user enterable and you can enter amounts directly on Schedule M-2 as necessary.

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jckco22Author

Level 2

Thanks for the info. How about the corresponding PPP expenses? Per IRS instructions should be reported in column a line 3 and column d line 5 on M-2. This is creating an error which negates e-filing the return(s).

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Samantha_at_Intuit

Level 3

This can be resolved by making the selection to not use the automated Schedule M-2/Retained Earnings Worksheet amounts. Schedule M-2 will then be user enterable, allowing you to enter amounts directly on Schedule M-2 as necessary.

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