You should know that loan proceeds received under the Paycheck Protection Program (PPP) are not taxable income, regardless if the loan was forgiven or not. Forgiven PPP loans are not considered cancellation of debt income, and as such, you should not report these loan proceeds on your tax return.
Economic Injury Disaster Loans (EIDL) are not taxable as income. That's because they are loans and must be repaid over time. Any interest payments may be used as a business tax deduction. Additionally, EIDL loans are not forgivable.
Your EIDL Targeted Advance is not counted as taxable income on your federal tax return per changes implemented through the Consolidated Appropriations Act. Additionally, typical business expenses paid for with EIDL loan or EIDL advance funds are tax-deductible.
CONTACT US TODAY if you have any questions or need help with the preparation of your business tax return.
Sincerely,
Maryna Varabyova, CPA
(877) 677-3737
info@vmtaxcpa.com
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