"and most likely on state return"

See if your client is on this list:

https://static.business.ca.gov/wp-content/uploads/2021/09/SBCRG-Final-Awards-List-as-of-9-17-21.xlsx

If so, that's the grant they got. The earlier link I gave:

https://gpwcpas.com/grant-credit-loan-and-other-relief-comparison-chart/

Tells you:

These grants are taxable for Federal.
Any expenses paid with this grant are deductible.

These grants are not taxable for California.

Here is a Spidell forum post:

https://www.caltax.com/forums/topic/is-ca-grant-taxable-lendistry/

This link has three Funding groupings: Financial Assistance, Loans and Grants:

https://www.sco.ca.gov/covid19ReliefAndAssistanceSM.html

Here is the link for Kings County:

https://www.countyofkings.com/home/showpublisheddocument/24041/637316316900500000

Here is the grant notice flyer:

https://www.countyofkings.com/home/showpublisheddocument/24045/637316343600670000

Here is the notice of availability:

https://www.countyofkings.com/home/showpublisheddocument/24041/637316316900500000

And: "Lendistry has been designated by the state to act as the intermediary for the Program to disburse the grant funds."

https://www.grants.ca.gov/grants/california-small-business-covid-19-relief-grant-program-round-5/

https://hanfordsentinel.com/news/lemoore-offers-small-business-assistance-grant/article_6f4b945d-a41...

All of this helps you know what sort of grant they got and what it is for and how it is treated, because now you have the sources and the facts.