VA (S-corp) with PPP loan forgiven in 2021 in excess of $100,000. I need to reflect that excess as a Fixed Date Conformity addback on line 9 of the Virginia 502.

Forum|Forum|5 years ago
April 8, 2021
1 reply
7 views

Because the loan was forgiven in 2021 - it is NOT income for Federal purposes so it is not entered on the Ordinary Income screen. However, the VA addback does need to be recognized in 2020 and it should be reflected on line 9 on the VA 502 as a Fixed Date Conformity - Other addback. I can find no way to enter anything on this line. When I try to enter it on the St. Adjustments screen, the amount is put onto line 12 which is incorrect.

Lacerte Tax

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P

PKCPAMST

Level 6

Under Va. Code Ann. 58.1-340(C), the taxpayer's method of accounting must be the same for state tax purposes as for federal tax purposes. Therefore, the PPP loan forgiven in 2021 should appear as a liability on the balance sheet as of December 31, 2020 on both Federal and Virginia tax returns.

"[T]he VA addback does need to be recognized in 2020." Can you please explain the reason for this statement?

sjrcpa

Level 15

Well, we're still not sure about timing, but VA only allows you to deduct $100K of expenses paid with a PPP loan that will be forgiven.

The more I know the more I don’t know.

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