For Fed reporting: The SBA payments are tax free; the Interest still is deductible.

"Under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, P.L. 116-136, the SBA is authorized to pay six months of principal, interest, and fees on covered SBA loans. The Consolidated Appropriations Act, 2021, P.L. 116-260, provides that these payments are not includible in the borrower’s gross income. In addition, Notice 2021-6, issued Jan. 19, waived Form 1099-MISC reporting requirements for these payments."

https://www.journalofaccountancy.com/news/2021/feb/irs-corrected-information-return-form-1099-misc.h...