Hello tkapler and Keymaster,
Thank you for coming to the QuickBooks community, you came to right place for the right information.
What you'll want to do is credit the stimulus check as a liability, you can name it whatever you want, that way you'll remember exactly what it is. You'll want to set it up as a short-term liability, if you know it'll be forgiven, since the life of the loan is only 8 weeks, If you think that even a small portion may not be forgiven, for any circumstances such as, but not limited too not rehiring enough full-time employees by June 30th, you can set it up as long term liability as it has a 2 year repayment plan.
Also, remember to record it in the name of the bank you received it from, you're paying back or being forgiven by your bank, not the SBA. Also keep an eye on this IRS fact sheet. It has everything you need to know about the PPP loan.
If you have any other questions or concerns, feel free to post them here.
Have a nice weekend.
I have a question to add on to this. We also received our stimulus check, and I set it up as a short term loan. My boss wants me add a credit against the loan, every time we run a payroll or pay utility bills. How do I do this?
This question is in reference to an SBA EIDL advance that was provided by the SBA (basically, a $10,000 advance on an EIDL application that does NOT have to be repaid) - how best do I record a liability that doesn't need to be repaid? Or how does one account for free money?
I just set up an "other income" account & put it in the description, and then deposited the ACH payment. Seems logical - I assume it's not tax-free income, but it's not a liability as it does not need to be repaid.
"What type of account do i set up for new stimulus check?"
More guidance/clarification is needed on this issue. For now, the stimulus check deposit goes to the PPP Loan short-term account in QBO.
I would create two new accounts:
1) PPP Loan Short Term - Bank Name (e.g. Chase)
2) PPP Loan Long Term - Bank Name (e.g. Chase)
See the screenshot below for reference.
#1 could turn into a grant loan (Forgiveness of loan)
#2 remaining balance from #1 should be reclassed to a 2-year loan as a long-term liability
Again, more guidance is needed in this area later.
Hi there, @AngelaP01.
Thanks for joining this thread.
At this time, changes are coming daily to QuickBooks Payroll products. I appreciate your patience as we work to support you. Once we have the update preparedto record the loan forgiveness the following article will be updated to show this as well: How do I prepare for Paycheck Protection Program loan forgiveness.
Please keep an eye out for any updates in your email and the QuickBooks Blog. You're always welcome to follow up on any related thread here in the Community as well.
We understand how difficult this time is for you and your business. Just know, I'm always here to help. Have a wonderful rest of your day!
I did the same. (for EIDL) I set it up as "Other Income" Then "Other Miscellaneous Income" in the Detail Type which is defined as "Use Other miscellaneous income to track income that isn’t from normal business operations, and doesn’t fall into another Other Income type." Then in the description I wrote, "The CARES Act EIDL Payment Per Active Employee"
If there are any other future entries I will use this same process. I did not apply for PPP. I can sustain business at this point with a bit of a struggle. My greatest concern is that Uncle Sam will ask for everything back if a yield on penny of profit at the end of my fiscal year.
it is a grant from eidl. . It is not a liability although we may have to pay income tax on it as a forgiven loan. The IRS has not clarified and we need written clarification. I am temporarily putting it in as other income and can always do a journal entry with clarification from congress/irs
Not sure about the EIDL, but the PPP loan, when forgiven, IS NOT considered taxable income... Here is the exact text from The CARES Act:
Section 1106 (i)
For purposes of the Internal Revenue Code
of 1986, any amount which (but for this subsection) would be
includible in gross income of the eligible recipient by reason of
forgiveness described in subsection (b) shall be excluded from gross
My question is in regards to the HHS Stimulus checks given to Medicare providers. It is not a loan but a "relief payment" for which we need to have documentation showing how we spent it. So I am wondering what account code/name to apply to it so I can code expenses to that account?
I understand why you would set up the EDIL as "other income" but when you run your P&L report, that EDIL grant money is included in income and will be included as taxable income for the company. I have consulted with a H&R Block tax professional and they stateed EDIL money will NOT be taxable, it is "grant" money.
Hi there, Chief Hammond.
I'll share some information about how the stimulus check works in QuickBooks.
As mentioned above, we can set it up this check as a short-term liability since the life of the loan is 8 weeks. If the check has 2 years repayment plan, we can set it up as long term liability. Additionally, please make sure to use the name of your bank upon setting up the liability account.
I encourage visiting our blog and the IRS Paycheck Protection Program Information Sheet from time to time to stay current with the PPP Loan updates. You can also read the article provided by my colleague, Kendra H to be guided in recording the loan forgiveness.
Do you have other questions in mind? Feel free to leave them below and I'll make sure to get back to you as quickly as I can.
I'm new to this and evidently posted in the wrong spot. I am interested in how to account for the Health and Human Services (HHS) CARES ACT Provider Relief Fund for healthcare providers. I can provide a copy of the email received from HHS on April 17, 2020, if that would be helpful to understand the premise and requirements. I have already entered in my PPP funds.
I'm new to this so I guess I posted my question in the wrong place. My question is not about PPP, it is about the Health and Human Services (HHS) CARES ACT Provider Relief Fund for healthcare providers who bill Medicare. I can provide the email from HHS if it would help.
Thank you!-Chief Hammond
Hi, Chief Hammond.
I found some great information on a the topic your speaking of. You can view these and let me know if they were helpful:
We're always here in the Community to help. Simply reply at any time to reach me.
I appreciate the information provided, but this does not address the question being asked. Health care providers (hospitals, doctor's offices, etc.) were given funds through the CARES Act Provider Relief Fund. It is not like the PPP in that it is not a loan (nor a forgivable loan). HHS allocated the funds to reach those on the front lines and protecting patients' access to health care. What account should this go in? Other income? Is it income? Is it taxable?
IRS Declares CARES Act Provider Relief Funds as Taxable Income. ... On July 13, 2020, the Department of HHS updated the FAQs for the CARES Act PRF to state payments that a provider receives from the CARES Act funds would be taxable income. They do not qualify as disaster relief payments under Section 139