@M Gibson 

"It's a tough question, and I am still looking for a definitive answer!"

No, it's not a tough question. It's very clearly addressed.

The IRS will tax it as business and that is Ordinary Income and that includes SE tax. The State either taxes it as Business, too; or exempts it specifically for their purposes and that will be codified in their regulations, which have been posted on the web.

The nontaxable grants of this nature, which are CARES funds passed down to businesses through Fed, County, Local governmental entities, Agencies, USDA, etc, that are exempt will be specified. One I have been following is Shuttered Venues, but even on the radio they announced none of those funds were paid out in 2020. Another is HVAC improvements. When your county health department gives grants to local medical clinics, that is another example of a grant that might be on the State's list as Exempt from tax. Food Banks also got these grants. But farmers through USDA were given taxable grants. And on this forum, there are questions regarding fishermen grants that were give that were based on foreign tariffs, not coronavirus. Same type of disbursements, different basis.

Yes, it is specifically addressed. No, it's not Tough to find.

If you need help doing that research, you are going to need to provide some details, of course.

Here is the Fed link:

https://www.irs.gov/newsroom/cares-act-coronavirus-relief-fund-frequently-asked-questions

Here is the MT link: https://mtrevenue.gov/2021/01/25/covid-business-grant-income-taxable-in-montana/

Here is the list of MT grants I have been following for over a year: https://commerce.mt.gov/Montana-Coronavirus-Relief/Awarded-Grants