State treatment for business expenses paid out from PPP

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#1
jamesc  
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Los Angeles
IRS changed their position to allow business expenses paid out from the PPP loan forgiven, but not for California.

Then, when we prepare Financial Statement, should we reclassify federally-deducted expenses as “Nondeductible expenses”, or leave those expenses and separately show them as “Other Income”? Is there a guidance I can find? Thanks.
 

#2
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Northern MI and Coastal SC
Match the financials to GAAP, not tax, unless required. But if tax, I would still match to Federal over state.

Keep in mind under GAAP, the income is deemed Grant Income. Expenses are recorded as ordinary expenses. At state level, you'll make adjustments as required to eliminate for permanent book/tax difference.
 

#3
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Do you have a tax provision to calculate for a financial statement tax accrual?
 


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