Hello, thank you so much for your response. 

Yes, the $683 is simply tax on income. She was surprised she owed the state any money and kept telling me she should receive "some business credit" for being a blind small business owner running a state funded program.

I began to second guess myself after speaking with her and figured I would post on here.

The loan is not forgivable. She had a profit of $10,589. I provided her with her K-1 and a voucher to pay Illinois $683.00. I will explain to her that the she is responsible for state income taxes.  

Thanks!