Are EIDL Loans Taxable?
Share this article:
Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.
Which COVID-19 Related Government Grants and Loans Are Taxable?
COVID-19 EIDL Loan
EIDL Advances
Paycheck Protection Program
State Taxation of PPP Loan Funds
California Florida Nevada North Carolina Ohio Rhode Island Texas Utah Virginia Washington
Do I Need to Worry About Being Audited If I Received an EIDL or PPP Loan?
They’re eligible to apply for PPP funds. They’ve calculated the correct loan amount. Loan funds were used on eligible expenses. They’re qualified for loan forgiveness.
SBA Audit Tips
Be Prepared. Stay organized with your bookkeeping and loan documentation right from the beginning, especially if you know your loan size is large enough to trigger an SBA audit. You’ll save a lot of time and headache if you prepare your finances in real time. Gather Your Documentation. Keep track of any documents related to proving your eligibility for the PPP or EIDL funds. Track expense receipts and payroll documents to demonstrate that PPP funds were spent on eligible expenses. Also, keep copies of financial statements and profit-and-loss statements to show that the business meets the lost revenue requirements. Keep all of these records for at least six years after repaying the loan or getting it forgiven. Get Professional Help. It can be difficult to keep track of the SBA and IRA requirements, as well as potential interpretations of some of their rulings. Consider hiring an accountant who regularly tracks what’s happening with EIDL and PPP audits. They’ll share that experience with you to make sure you’re keeping the right records and that everything is accurately submitted when the audit begins.
The Takeaway
Frequently Asked Questions
SOLC0721131
About the Author
Lauren Ward is a personal finance expert with nearly a decade of experience writing online content. Her work has appeared on websites such as MSN, Time, and Bankrate. Lauren writes on a variety of personal finance topics for SoFi, including credit and banking.
Share this article: