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officemanager14
Level 2

How do I categorize an Owner's Pay from a PPP Loan for a Sole Proprietor?

We received a PPP Loan which will mostly be used to pay the Owner. How do I categorize this transaction in Quickbooks? Normally it is under Owner's Pay
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Best answer April 01, 2021

Best Answers
john-pero
Community Champion

How do I categorize an Owner's Pay from a PPP Loan for a Sole Proprietor?

The incoming loan funds are initially treated like any other loan. A liability. If and when it is forgiven that is a tax free grant that eliminates some or all of the liability.

 

The payouts to owner continue to be Owner Draw.  Nothing in that respect changes.

View solution in original post

2 Comments 2
john-pero
Community Champion

How do I categorize an Owner's Pay from a PPP Loan for a Sole Proprietor?

The incoming loan funds are initially treated like any other loan. A liability. If and when it is forgiven that is a tax free grant that eliminates some or all of the liability.

 

The payouts to owner continue to be Owner Draw.  Nothing in that respect changes.

View solution in original post

officemanager14
Level 2

How do I categorize an Owner's Pay from a PPP Loan for a Sole Proprietor?

Thank you!

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