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Level 1

Where are you entering the PPP loan amount on the California return.  We are adding the PPP loan amount as an M-1 adjustment for federal and as other addition on Screen 44.  Wondering if there are other suggestions.

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6 Replies 6
Level 1

I am wondering the same. When I add as an adjustment on Screen 44 it does not flow through to the CA K1 and I have to manually override the K1. Are you having the same issue?

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Level 2

Yes, I am having the same issue of adjustment on Screen 44 not flowing to the CA K1. 

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Level 5

Hopefully a future Lacerte update will accommodate this by allowing "state, if different" fields/column to S-Corp screen 15.

I imagine nothing's in Lacerte yet to accommodate this because Congress just passed the law two weeks ago to allow federal deduction of those expenses, so Lacerte wasn't expecting fed/state differences to exist.

So until then, I imagine everything will have to be backdoored and manually adjusted.

*If this (or another answer/reply) solves your problem, please click "Accept as Solution" to get this post out of the "Unanswered" queue of posts.*
Level 1

Does adjustment under "California Conformity Adjustment" in screen 44 work under "Ordinary Income" ?

Level 2

It puts it in the right place on the K1, so thank you for that suggestion

Level 3

"A.B. 1577  denies business expense deductions for those expenses that were paid for using forgiven loan funds."

Technically it is not the cancelation of the PPP debt that cause an increase in net income, taxable to CA, but rather the denial of the expenses paid with "forgiven" loan funds. 

If my client's PPP loan is not yet forgiven at 12/31/2020 the the expenses paid are allowable on my 2020 return, and not disallowed until 2021 when the loan is forgiven (at which point I'll just include them in income for simplicity; 6 of one or half dozen of the other!).

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