Business received - Non-taxable Grant Revenue - 1040 Schedule C

[KGL19]

Business received - Non-taxable Grant Revenue - 1040 Schedule C - How do you enter? Business is in Maryland.

[TaxGuyBill]

First double check that it is not taxable, because there are not a lot of grants that are not taxable.

If it is not taxable, it does not go on Schedule C or anywhere else on the Federal tax return.  If it is not taxable to the state, I wouldn't think it would be entered on the state either.

[qbteachmt]

"Business received" is the place to start. Research the specific grant to find the specific code that excludes that specific grant from Fed tax; then, do the same for State. A lot of people are confused about the CARES grants; these grants flowing to businesses are Fed taxable unless you find the specific exclusion. Or, this is EIDL grant? What was the purpose of the specific grant?

Links:

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

https://financialadvisors.com/blog/blogdetails/covid-19-related-government-grants-taxable-or-not