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Level 1

How do I record an EIDG ("Economic Injury Disaster Grant") payment from the US Treasury?

 
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Best answer April 25, 2020

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Community Champion

How do I record an EIDG ("Economic Injury Disaster Grant") payment from the US Treasury?

First, I think you may mean EIDL where L is loan. If you have been approved and funded by the SBA for an EIDL. 3.75% 30 year loan that is a long term liability without forgiveness.

 

If, instead, you are a prior SBA borrower and they have refunded some of your prior loan payments and/or are paying some of your future payments without you having to reimburse, this is income. A grant is income. It might not be taxable and there will be a spot on your tax return to report non taxable income but for now add a separate income account for grants or this one in particular and record the amount

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Highlighted
Community Champion

How do I record an EIDG ("Economic Injury Disaster Grant") payment from the US Treasury?

First, I think you may mean EIDL where L is loan. If you have been approved and funded by the SBA for an EIDL. 3.75% 30 year loan that is a long term liability without forgiveness.

 

If, instead, you are a prior SBA borrower and they have refunded some of your prior loan payments and/or are paying some of your future payments without you having to reimburse, this is income. A grant is income. It might not be taxable and there will be a spot on your tax return to report non taxable income but for now add a separate income account for grants or this one in particular and record the amount

View solution in original post

Highlighted
Level 1

How do I record an EIDG ("Economic Injury Disaster Grant") payment from the US Treasury?

Thank you.  I am pretty sure it is a grant.  There is EIDL, EIDG, and EIDADV.  I have read that EIDG is a grant of $1,000 per employee, which is consistent with what we received.  But you still answered my question on how to record it.

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Level 1

How do I record an EIDG ("Economic Injury Disaster Grant") payment from the US Treasury?

I appreciate your insight.  I was researching the EIDL and came across this statement on the SBA site that says the loan will not have to be repaid.  This is different than your response.  Would you please review and comment?

 

The Economic Injury Disaster Loan advance funds will be made available within days of a successful application, and this loan advance will not have to be repaid

https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/economic-injury-disaster-loan-...

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Level 1

How do I record an EIDG ("Economic Injury Disaster Grant") payment from the US Treasury?

I appreciate your insight.  I have been researching the EIDL and came across the following statement from the SBA website that says the loan will not have to be repaid.  This is different than your response.  Would you please review and comment?  Thank you

 

In response to the Coronavirus (COVID-19) pandemic, small business owners in all U.S. states, Washington D.C., and territories are eligible to apply for an Economic Injury Disaster Loan advance of up to $10,000. This advance will provide economic relief to businesses that are currently experiencing a temporary loss of revenue. Funds will be made available following a successful application. This loan advance will not have to be repaid.

https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/economic-injury-disaster-loan-...

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Level 3

How do I record an EIDG ("Economic Injury Disaster Grant") payment from the US Treasury?

Hi John, everyone I spoke to that received the EIDL said that they did not receive loan documents with terms for repayment.  The funds were just deposited in the business account they specified during the application process.  I don't recall seeing anything about interest or payment terms when I applied. 

 

Some businesses are showing that they received an EIDL and others are showing that they received an EIDG.  Why there is a need for both designations when the EIDL page states that it does not have to be repaid, I don't have an answer for that.  Maybe the EIDL is considered income and the EIDG is not?

 

What are your thoughts?

 

UPDATE:  I just found this information after I posted.  There is an advance of up to $10,000 that most people will be approved for while waiting to hear if they got the SBA EIDL loan.  And the advance does not have to be repaid.  Read this blog post for additional information.

 

https://www.nav.com/blog/what-is-the-economic-injury-disaster-loan-grant-and-what-does-it-mean-for-s...

 

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Community Champion

How do I record an EIDG ("Economic Injury Disaster Grant") payment from the US Treasury?

We are still waiting on our $10k advances (there was supposed to be an initial advance for everyone that applied and it was not supposed to be employee dependent but mid-stream they changed it to prioritize or restrict the $10k advances to companies with employees and probably going to companies with highest number first - thus  kicking small mom and pop's to the end of the line.  If you have no employees but got an advance more power to you but it would be rare.

 

A grant by any other name is still income.  And it will be non-taxable, probably. And yes, if you get both an advance (which, BTW, the SBA still refers to as a "loan advance") and a PPP loan your forgiveness of the PPP is reduced by the amount of the advance

 

https://www.uschamber.com/sites/default/files/uscc_covid19_sb-economic-injury-disaster-loans.pdf

 

So, $10k less in forgiveness might mean $10k at 1% for 2 years. Sure, that is the PPP loan, but still an unforgiven amount to be repaid

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Level 1

How do I record an EIDG ("Economic Injury Disaster Grant") payment from the US Treasury?

there is a lot of good information for future reference about the EIDG (a program the SBA has had for a long time preceding the US PPP Loan Program. And you are indeed correct., the G stands for Grant and does not have to be repaid. It therefore becomes income and should be recorded as such. Whether it becomes a taxable event will depend upon your tax situation for 2020.

https://www.bumpitmarketing.com/sbad-treas-310-deposit/ 

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Level 2

How do I record an EIDG ("Economic Injury Disaster Grant") payment from the US Treasury?

Thanks for the advice - for the EIDG (not the loan) income account, what detail type from the drop down list in QBO should be chosen for this specific situation?

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Level 3

How do I record an EIDG ("Economic Injury Disaster Grant") payment from the US Treasury?

Thanks for the clarification!  I am a one person shop and got the $1,000 advance two weeks ago, $1,000 per employee, but I have not heard back about the EIDL.  I'm pretty sure they are going in order of when the applications were received.

 

I also applied for the PPP, hopefully that comes through.  You can only get one or the other, EIDL or PPP.  So if I understand you correctly, if I get the PPP the amount that is forgiven is the loan amount less $1,000.  Basically I'll end up with a $1,000 loan.

 

Thanks again!

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Level 3

How do I record an EIDG ("Economic Injury Disaster Grant") payment from the US Treasury?

I used Other Income, then Other Miscellaneous Income.  Typed Non-taxable Income and the grant name in the description.  It appears at the bottom of the P&L juat above Net Income.

 

Anyone have an opinion on that?

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Level 1

How do I record an EIDG ("Economic Injury Disaster Grant") payment from the US Treasury?

It is my understanding that the EIDG (grant) does not have to be repaid, and is a non-taxable grant. I saw another article that said it should be recorded as non-shareholder contribution to capital, and thus not income and not taxable. It does, however, reduce the forgivable portion of the PPP loan, so that amount must then be repaid under the PPL loan arrangement.

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Level 2

How do I record an EIDG ("Economic Injury Disaster Grant") payment from the US Treasury?

"EIDG is a grant of $1,000 per employee"

May I ask where you read this?  I haven't been able to find much information about how the EIDG must be used.   I would really appreciate it.

 

Thank you, Aurora Pascua.

 

 

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Level 2

How do I record an EIDG ("Economic Injury Disaster Grant") payment from the US Treasury?

How do you know it's $1,000 per employee?  We received an EIDG, but since we have no correspondence in that regard, we do not know exactly which expenses to apply it (payroll vs. bills).  Any help is appreciated.  Thank you, Aurora.

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Level 1

How do I record an EIDG ("Economic Injury Disaster Grant") payment from the US Treasury?

I saw a comment about the EIDG "G".  The comment indicated that the questioner was mistaken and should have said EIGL "L".  The questioner was not mistaken.  There is a EIDG "G" Grant.  Is there a difference? How does each relate to PPP forgiveness?  (reference john-pero 4-25-20.)

So, if a EIDG was received and not used for payroll or other PPP items, does it have to be listed on the PPL loan forgiveness form?

 

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Level 3

How do I record an EIDG ("Economic Injury Disaster Grant") payment from the US Treasury?

Not sure if anyone answered this for you.  The EIDG does not have to be repaid and as far as I know there are no restrictions on how you use it.  If you received an EIDL on or before 4/3/2020 then there is some reference to using the PPP to pay down the EIDL.  I'm not sure about the grant portion.  After 4/3/2020 there is no reference to using PPP funds to pay down the EIDL or EIDG.  You should speak to an attorney and/or tax accountant because it is extremely difficult to get someone from the SBA on the phone.  And the banks that issued the PPP loans differ on how funds are to be allocated and on the terms of loan forgiveness.

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Level 3

How do I record an EIDG ("Economic Injury Disaster Grant") payment from the US Treasury?

Just wanted to clarify what I said previously.  You can get both PPP and EIDL loans, you just can't use them both for the same purpose.  So if you use the PPP for payroll you can't use the EIDL for it.

 

And the grant does not have to be repaid but there are some references to it being refinanced with the PPP, but that may be only if you received and EIDL prior to 4/3/2020.  Check with an attorney and/or CPA to be sure though.

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Level 3

How do I record an EIDG ("Economic Injury Disaster Grant") payment from the US Treasury?

Hi Aurora, did you get your question answered?  I've been away from QuickBooks Community for a while.  The EIDG was an advance of up to $10,000, $1,000 per employee.  I don't think there are any restrictions on how you use the funds but you should speak to an attorney and/or CPA on that.  So much information on the internet is hard to decipher and there are some conflicting articles out there.  Let me know what you find out.

Highlighted
Community Champion

How do I record an EIDG ("Economic Injury Disaster Grant") payment from the US Treasury?

You can use the EIDL for payroll, just not the same payroll that the PPP loan is used for. Once you achieve 60% or PPP loan spent on payroll you could spend the full EIDL on payroll from then until the cows come home.  (or December 31st)

 

Any advance EIDL whether you get an actual EIDL loan or not is DEDUCTED from your total forgivable PPP loan. And there is no difference on when you received either. Simply put, if you received a $10,000 advance from EIDL with or without any true loan, and received a $100,000 PPP loan, no matter how you slice it, even receiving full 100% forgiveness of the $100k PPP you will be left with a hanging balance of PPP for $10,000.  Sure you don't have to repay the "free" $10k but they get it back by not makng your PPP zero after forgiveness.  Due to the PPP loan being amortized over a shorter period and the EIDL over 30 years , yes you will pay off teh EIDL advance with EIDL loan funds. Nothing from  D.C is ever truly free

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Level 3

How do I record an EIDG ("Economic Injury Disaster Grant") payment from the US Treasury?

John, not sure if you saw this.  According to the notice below there is a difference on when you receive the loan.  What are your thoughts?  This gets more confusing by the day!

SBA PPP Info.png

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Community Champion

How do I record an EIDG ("Economic Injury Disaster Grant") payment from the US Treasury?

First I've seen it. I will expect some additional guidance from my CPA firm which has held informative webinars, but here is my initial take.

 

1. You cannot pay down an EIDL  loan with a lower interest rate PPP loan if the EIDL loan was received any time other than 2/1/20-4/2/20 (first day of application for PPP)

 

2. Refinance not required if the 2/1/20-4/2/20 EIDL loan was used for other than payroll

 

3. Refinance with PPP required if used for payroll.

 

To my eyes this means that if you received an EIDL before you could apply for PPP and used it for payroll you only get one set of funds

 

Additionally the good news at the end means that any EIDL advance is NOT added to the EIDL loan amount.

 

Bad news is, until I see otherwise in a third version of forgiveness application, the EIDL grant is still defucted from forgiveness, which in essence negates the last paragraph since the grant gets deducted from the forgivenesd of PPP

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Level 1

How do I record an EIDG ("Economic Injury Disaster Grant") payment from the US Treasury?

G is for economic injury so there two parts disbursed.

EIDG for economic injury is the grant.

EIDL is the loan.

Highlighted
Level 1

How do I record an EIDG ("Economic Injury Disaster Grant") payment from the US Treasury?

The Terms for repayment of these loans are posted on the EIDL information page just before you apply for the loan

 

https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/economic-injury-disaster-loans 

 

  • 3.75% for businesses (fixed)
  • 2.75% for nonprofits (fixed)
  • 30 years
  • No pre-payment penalty or fees
  • Deferred 1 year; interest still accrues

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