how to enter California Relief Grant to Schedule K-1 (100S)

[David94]

Hi,

CA Relief Grant is taxable in federal tax return, but not taxable in CA state tax.

Even though I adjusted CA relief grant on the Form 100S line 12 "other deductions", it does not show on Schedule K line 1 column (c) CA adjustment and schedule K-1 (100S) line 1 column (c) CA adjustment.

Where do I adjust CA Relief Grant to apply to Schedule K & Schedule K-1 (100S)?

Thank you for your advise in advance.

[MarinaEA]

Have you figured this out? I am dealing with the same issue. 

[David94]

Though I don't remember exactly how to do, I think I manually entered the numbers as below.

1. Form 100S p4-6, Sch K Other Income (Loss) 10b Other income (loss): CA Relief Grant, California box -15,000

2. Form 100S p4-6, Sch M-1 6c Other: CA Relief Grant, 15,000

Thank you.

[MarinaEA]

I think, the way you are describing is the correct way to do it. I have been going back and forth with this with others who are suggesting different ways and I am researching, but doing it any other way does not quite add and or then it affects the basis. Here is the article with Proseries instructions how to do it, but it makes no sense and does not work the way they are describing. I almost want to call Proseries about this. Proseries is saying this:

https://proconnect.intuit.com/support/en-us/help-article/business-income-taxes/enter-ppp-loans-eidl-...

S-Corporate:

1. Open the California return.
2. Open Form 100S p4-6.
3. Scroll down to the Schedule K on Side 6.
4. Enter the amount of the grant and description on the Other deductions line 12e in the CA Adjustment line.
5. This amount will be reported on the CA Schedule K, line 10b, column c.

This does not work the way they are describing at all and does not flow that way at all. 

I searched 100S instructions on FTB and found in their revised 100S instructions that they say to deduct the grant amount on line 12 and to enter the amount on Schedules K and K-1 100S line 10b column C. Which is what you are describing, seems. If we enter it on line 10b column c, it flows to the line 12 "other deductions "of 100S.

How does shareholders basis work here though? That grant it tax exempt income so it should increase shareholders basis, correct? In my case, seems I have that 15k grant showing as loss carryover under basis statement of 100S since distributions were in excess of basis so I guess that 15k deduction is suspended until next year. Am I following this correctly? My brain is so exhausted this year with PPP, EIDL, Grants, etc. and how to record and how it impacts basis or does not and what's taxable for federal and not for state, etc. Ugh.