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badarac
Level 2

How do I record an EIDG from SBA in QB self employed?

I had a deposit show up in my business checking account with the description MISC PAY SBAD TREAS 310 NTE*PMT*EIDG. Supposedly this is a forgivable grant. I've seen other conversations that recommended recording this as other income or in the case of an EIDL payment as a loan. QB self employed only has an Income category. How do I account for this grant payment in QBSE?

 

Solved
Best answer May 07, 2020

Best Answers
Tori B
QuickBooks Team

How do I record an EIDG from SBA in QB self employed?

Good morning, @badarac.

 

Thanks for following up with us. 

 

When it comes to income, there are only two categories:

  • Business
  • Personal

Taxes are taken out on business income. I recommend checking out Income: Business Income. It explains what does and doesn't count as business income and I think you may find it very resourceful. If you still don't feel comfortable about what category you'd like to use, I recommend reaching out to your accountant, as they can advise what is best for you and your business. If you don't have an accountant, don't sweat it. You can find one here in our Resource Center

 

Don't hesitate to let me know if you have further questions or concerns. You can always reach out to us here in the Community anytime you need a helping hand. Take care and enjoy the rest of your day! 

 

 

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11 Comments
Steve_C
QuickBooks Team

How do I record an EIDG from SBA in QB self employed?

Hi badarac. With QuickBooks Self Employed you can use the  Business Loan category now available in QuickBooks Self-Employed (QBSE) for you to track business loan transactions. However, it would be advised to reach out to a tax professional as well from our Find a Pro-Advisor page to further guide you on properly tracking your loans. 

 

If you want to  learn more about the categories available in QBSE, you can read the articles below. 

Please let me know if you need anything else, I'll be happy to help you get back on track to proper bookkeeping. 

 

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badarac
Level 2

How do I record an EIDG from SBA in QB self employed?

Thanks so much for your help. In this case it is not a loan, it's a grant (EIDG as opposed to EIDL). So technically I think it's income which may be non-taxable. In other QB products there is an Other Income account. I've seen recommendations for QBO to record it as Other Income non taxable. That doesn't exist in QBSE. Recording it as a loan would imply that it needs to be repaid and I'm not sure where that winds up in the P&L or SCH C. Any thoughts?

Tori B
QuickBooks Team

How do I record an EIDG from SBA in QB self employed?

Good morning, @badarac.

 

Thanks for following up with us. 

 

When it comes to income, there are only two categories:

  • Business
  • Personal

Taxes are taken out on business income. I recommend checking out Income: Business Income. It explains what does and doesn't count as business income and I think you may find it very resourceful. If you still don't feel comfortable about what category you'd like to use, I recommend reaching out to your accountant, as they can advise what is best for you and your business. If you don't have an accountant, don't sweat it. You can find one here in our Resource Center

 

Don't hesitate to let me know if you have further questions or concerns. You can always reach out to us here in the Community anytime you need a helping hand. Take care and enjoy the rest of your day! 

 

 

View solution in original post

badarac
Level 2

How do I record an EIDG from SBA in QB self employed?

Thanks. That was helpful. I'll continue to follow up and will record it as personal income unless I find more clear guidance in the future. 

LauraHBK
Level 2

How do I record an EIDG from SBA in QB self employed?

According my personal CPA there is no clear answer yet on the EIDG funding. Yes it is a grant vs a loan but no details yet on whether or not it will be considered income. The EIDL is absolutely a loan, in most cases payable out over 30 years and should be on your balance sheet as a liability. Historically disaster grants have been taxable income but with the CARES act it is not clear as to what the intentions were so we are still waiting on an official decision

theacctglady05
Level 1

How do I record an EIDG from SBA in QB self employed?

Hi, I just wanted to chime in on this conversation.  I know I am a bit late to the party.  The EIDL Advance is a Grant if you DO NOT receive the EIDL loan or PPP Forgiveness Loan.  The EIDL Advance becomes a loan if you get the EIDL and/or PPP.  Hope this helps.

AmbrightConsulting
Level 2

How do I record an EIDG from SBA in QB self employed?

Hi, thanks for attempting to help with this question; however, your information is inaccurate. For reference, I am a small business consultant who specializes in CARES Act/PPP/EIDL for SMBs. 

 

The EIDLA never needs to be repaid and therefore is never considered part of the loan. It is essentially Grant. If an EIDL is refinanced into a PPP loan, the Advance is deducted and therefore never included in the balance of either the EIDL or PPP.

 

At this time, there is no official guidance on treatment of the EIDLA as taxable income. Some sources will say it should be presumed taxable business income (which is how I have recorded it until further guidance is available). Other sources will point to the General Welfare Exclusion which I believe will ultimately be applied by the IRS; see below. (I am not a licensed accountant or tax professional.)


"The IRS has consistently concluded that payments to individuals by government units, under legislatively provided social benefit programs, for the promotion of the general welfare, are not includible in a recipient’s gross income. The classic example of this type of payment is a government payment made to victims of a natural disaster.

To qualify under the GWE, payments must

  • Be made from a government fund.
  • Be for the promotion of the general welfare, based on individual or family need.
  • Not be made as payment for services."

(Journal of Accountancy, 2006) 

AmbrightConsulting
Level 2

How do I record an EIDG from SBA in QB self employed?

UPDATE: The EIDL Advance is statutorily excluded from taxable income. In QB:SE, ensure you record the transaction as a transfer or exclude it from your income.

mmus
Level 1

How do I record an EIDG from SBA in QB self employed?

I am about to file my Form 1065 (Income for Partnership).  I received a $ 1,000 EIDG  (clearing marked on my direct deposit as a Grant.)  I realize it is totally forgivable and does not count as Taxable Income.  It was used to pay for my day to day operating expenses for most of 2020.  My Question: Where does it go on my 1065?

Line 7 "Other Income." (attach statement)?  What should I put in line 20? "Other Deductions" (see statement)  I talked to the IRS today and they said its always good to be "in compliance."  So, attach a statement and spell that out.  I got the $ 1,000 Grant and it was spent on day to day operating expenses.  Does that sound right?

Benfar
Level 1

How do I record an EIDG from SBA in QB self employed?

Do you have a better solution for this question by now?

 

JonpriL
Moderator

How do I record an EIDG from SBA in QB self employed?

Hello @Benfar,

 

As much as I'd love to offer help and share how you're able to record your transaction, we've got separate support who can address this in no time.

 

That said, I'd recommend contacting our Customer Care Support. With their tools, one of our specialists can pull up your account on file and share the steps needed to categorize your transaction accordingly. To do so:

 

  1. Go to Help.
  2. Select Contact Us.
  3. Enter a few words describing how you wish to accomplish your goal for today in the What can we help you with? field.
  4. Click Continue.
  5. Choose a channel where you wish to connect with our dedicated support.

 

In addition, here's an article you can read to learn more about our support hours: Contact QuickBooks Products and Services Support.

 

Lastly, I've also included this reference for a compilation of articles you can use while working with us: Help Articles for QuickBooks Self-Employed.

 

If you have any other questions, please let me know by leaving any comments below. I'll be here to lend a hand.

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