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Wisconsin PPP Loans - Line 10 Other Income

Jenny2020
Level 1

I read in the Wisconsin Form 5S instructions that we are supposed to use Line 10 Other Income to record the PPP loan amount assumed to be forgiven (and thus effectively added to Wisconsin income).

When I fill in Line 10 with an adjustment, it is not populating the adjustment on the shareholder K-1. 

Does anyone know if this is a software glitch or am I doing something wrong that it is not transferring it over to the K-1?

Thank you!

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3 Replies 3
qbteachmt
Level 15

"to record the PPP loan amount assumed to be forgiven"

Assumed? You already had that year end. Was it forgiven, or not?

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Jenny2020
Level 1

Wisconsin is currently adopting the IRS Revenue Ruling 2020-27, which is now outdated for federal purposes and was replaced by the law signed into effect December 29th. This is the current verbiage about treatment of PPP loans in the state of Wisconsin.  I'm not wondering about the tax treatment of the loan, but how I can get Proseries to process what should be happening.

"A taxpayer that received a covered loan guaranteed under the PPP and paid or incurred certain otherwise deductible expenses listed in section 1106(b) of the CARES Act may not deduct those expenses in the taxable year in which the expenses were paid or incurred if, at the end of such taxable year, the taxpayer reasonably expects to receive forgiveness of the covered loan on the basis of the expenses it paid or accrued during the covered period, even if the taxpayer has not submitted an application for forgiveness of the covered loan by the end of such taxable year."

Thank you!

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SDJayhawk
Employee
Employee

The Wisconsin Form 5S instructions request that the taxpayer record the PPP loan amount assumed to be forgiven on line 10, Other additions on Form 5S, Schedule 5K, Part III.

The taxpayer would enter this amount on page 6 of the Form 5S, Part III, line 10 in the software.  The adjustments from Part III will flow to page 3, line 1, in Column C, of Form 5S, Schedule 5K, Part II successfully posting a Wisconsin only adjustment to the taxable income.

As a result, the adjustment will successfully be recorded on the respective K-1's for the impacted members.

 

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