SBA 7(a) loan forgiveness for S-Corp - treat as nontaxable?

[ljr]

Just want to confirm I'm up to date with what the final regulation is for regular SBA loan payment forgiveness. S-corp client has existing SBA loan which had 6 months of payment made to bank by SBA. Originally I thought this would be taxable cancelled debt income but I think I remember seeing that is now treated as non taxable income. Am I correct and where would be the correct place to input on the 1120-S return? Thanks.

[BCW60]

For the form 1120s - PPP Loan Forgiven, entered as NON-Taxable income -- Enter on "Schedule M-1 Items Worksheet", under "Permanent Items (Tax-Exempt Income).  I used the free-form entry line with description "Non-Taxable Income - PPP Loan Forgiveness".

[qbteachmt]

I believe this is the correction reference for your SBA loan client:

https://www.irs.gov/pub/irs-drop/n-21-06.pdf