Covid-19 created a lot of uncertainty and financial crisis for multiple small businesses. In order to protect them, the government introduced the Paycheck Protection Program. It was introduced under the Coronavirus Response and Relief Supplemental Appropriation Act of 2021 and was meant to provide small businesses with funds to pay the payrolls for up to 8 weeks. Those funds could also be used to pay interests on mortgages, rent and utilities by the businesses. While the scheme ended on May 31, 2021, existing borrowers are still eligible for PPP. These were the lendings by the government and while businesses were expected to return them, a lot of them applied for loan forgiveness which was approved. This article will discuss how you can record PPP loan forgiveness in QuickBooks desktop.
Wondering how to record PPP loan forgiveness in QuickBooks? Just call an expert at +1-(855)-955-1942 and they will guide you about the whole process.
Banks offering Paycheck Protection Program (PPP) loans through QuickBooks
Intuit Financing Inc (d/b/a QuickBooks Capital) has been authorized as SBA Paycheck Protection Program lender. There are also other banks under Paycheck Protection Program(PPP) that offers loan within QuickBooks that the application directly deals with:-
- Intuit Financing Inc (Subsidiary of Intuit Inc)
- Cross River Bank
- New Jersey State Chartered Commercial Bank
- Member FDIC
NOTE: The minimum loan amount that the borrowers could receive depends on the state they are living in.
Steps to Record PPP Loan Forgiveness in QuickBooks
Users are required to create a journal entry to record PPP loan forgiveness as an income. User should record it in a way that QB knows it is a non-taxable income:-
- Go to the Company drop-down menu and select Make Journal Entry.
- A new screen will appear, enter in the date and entry number.
- Go to Account and search PPP loan, the account should come up in which you credited your PPP loan balance, select it.
- Now debit the amount of loan that has been forgiven.
- Now go to the next row of the account column, tap on it and select Add New.
- Set this account as Other Income.
- Give a name to this account such as “non taxable PPP forgiveness”.
- Hit Save and Close.
The Journal entry should balance itself. It is very important that the person preparing your tax return knows that it is non-taxable income and separates this entry from the rest.
Call Experts to Record PPP Loan Forgiveness in QBDT!
Thanks for stopping by! So this has been all about how to record PPP Loan Forgiveness in QuickBooks. If you still have any doubts, reach out to our experts at QuickBooks Data Service Solutions Helpline Number +1-(855)-955-1942 and they will help you out.