Client received $40,000 CEBA loan in 2020
$10,000 “forgivable” portion included as income in related 2020 tax return.
In 2021, client applied and received $20,000 extension without informing me.
Related tax return was filed without the $10,000 forgivable portion as income.
$40,000 was repaid before deadline.
Next Step:
Adjust 2021 return to include forgivable $10,000 as additional income
Include the forgivable $20,000 in 2023 return’s deduction.
Any comments or issues I might be missing?
That should cover it all, I believe.
Your last step is in error. Don’t do it. The forgivable $20,000 is not a deduction. It’s only a deduction if the client could not repay the $40,000 and ended up owing $60,000. The $20,000 forgivable portion is no longer forgivable and the $20,000 becomes a deduction in 2024. Not 2023, since the cutoff to receive loan forgiveness was Jan.18/24. So, if the client repaid $40,000 by Jan.18/24, there are no further tax entries. The income inclusion of the two $10,000 amounts has already been dealt with.
Thank you for the clear reply @jhd.hemeon.
Using the same principle, next time I send flowers to my daughter in Edmonton, I’ll have her pay the “delivery charges” … 
Regarding non-forgiven CEBA - The forgivable portion is not automatically deducted in 2024. It is a deduction in the year of repayment.
The deduction is allowed if the amount was repaid in the year pursuant to a legal obligation to repay an amount that was included in income by virtue of paragraph 12(1)(x) or that reduced the amount of an expense under subsection 12(2.2). For example, say that a taxpayer borrowed the maximum $60,000 CEBA loan in 2020, so the $20,000 forgivable portion was included in income for 2020. If the taxpayer repays the entire loan in 2024, no amount of the loan is forgiven due to the timing of the repayment. However, the taxpayer would deduct $20,000 under paragraph 20(1)(hh) in 2024.
The timing of the paragraph 20(1)(hh) deduction can be complicated if the loan is not entirely repaid in a single year. For example, if a taxpayer borrowed $60,000 in 2020, repaid $40,000 in 2024, and repaid $20,000 in 2025: should the deduction for $20,000 be made in 2024, 2025, or should it be prorated between the two years? According to the CRA’s comments in document 2020-0862931C6, the timing and amount of the deduction depend on the intent of the parties.