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.
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.
"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!).