Client received an EIDL Grant and a PPP Loan - Are Both non-taxable?

[Ephesians3-14]

My client received $1,000 as an EIDL grant in April and then received $20,000 as a PPP loan. I know that the PPP loan proceeds are tax-free and that the proceeds can be used to pay for deductible expenses.

Regarding the $1,000...is that also tax-free under the recently passed legislation?

[TaxGuyBill · Accepted solution]

Yes, it is treated the same way as PPP.  It is not taxable and the expenses are deductible.

[Dependable]

If a client only received a EIDL loan for $20K is it taxable?

[sjrcpa]

Not taxable but it is a loan and needs to be repaid.

[Dependable]

Thank you much