Recipients who did not fully expend award funds before December 31, 2021 must complete annual reporting submissions until they fully expend the award funding, or the period of performance expires. Accordingly, these FAQs may not address any particular taxpayer's specific facts and circumstances, and they may be updated or modified upon further review. Californians received news that the IRS decided the tax fate of special state payments "stimulus checks" made to millions of people across the country during 2022. And you still haven't told us what this grant was for, nor what sort of entity applied for and received it. Automatic. In general, individuals must include in gross income any payment or accession to wealth from any source unless an exclusion applies. But . Will You Pay Taxes on Your 2022 State Stimulus Check? Funds may be used for specific expenses, which include: Grantees are required to maintain documentation demonstrating compliance with eligibility and other requirements of the Shuttered Venue Operator Grants program. A Form 1099-MISC reporting the payment would be required if the payment constituted income to the recipient. @ RMenschel Yes, you are correct in that the Form1099-G you received should be entered in the Other Common Income section of TurboTax, although, depending on your situation, you may have to enter such income another waywhich we discuss below. California middle class tax refunds (sometimes called California "stimulus" payments) were one-time relief payments that ranged from $200 to $1,050. We'll help you get started or pick up where you left off. Impacted by California's recent winter storms? Among other high-profile issues, the Supreme Court is considering a case involving taxpayer privacy and the IRS. I went through all the questionnaires. Each qualifying family receives a flat amount under the program. Here are a few important points to know: 1. Other Income better covers the Grant as income. Q2. A Form 1099-MISC reporting the payment would be required if the payment constituted income to the recipient. The agreement also partially conforms California tax law to new federal tax treatment for loans provided through the Paycheck Protection Plan, allowing companies to deduct up to $150,000 in expenses covered by the PPP loan. It's where you need to Start. President Biden wants to revive the higher child tax credit and monthly advance payments, while some Republican senators have their own ideas for the popular tax break. ", "Any expenses paid with this grant are deductible.". thank you so much in advance. No, this will not be an issue with the IRS as long as you report the amount of the grant as income received whether that is taxable or non-taxable income. Each qualifying family receives a flat amount under the program. These are distributed and administered by SBA, and are non-taxable grants. Here is a suggestion, click on "Forms" in the upper right side of your page. I am a sole proprietor that received aCalifornia Small Business COVID-19 Relief Grant. The SBA offers more RRF information. We really cannot help without more details. document.write(new Date().getFullYear()) California Franchise Tax Board. They had the small business relief grant. By Kelley R. Taylor Some SLFR Fund recipients may have to report certain payments as income and may owe tax depending on the purpose of the payment. However, payments made to or for the benefit of an individual are not treated as qualified disaster relief payments to the extent the expense of the individual compensated by such payment is otherwise compensated for by insurance or otherwise. The IRS unveiled its much-anticipated strategic operating plan detailing how the agency will spend $80 billion in funding allocated over 10 years under the Inflation Reduction Act. For taxable years beginning on or after January 1, 2019, California law allows an exclusion from gross income for covered loan amounts forgiven under the federal CARES Act, Paycheck Protection Program (PPP) and Health Care Enhancement Act, Paycheck Protection Program Flexibility Act of 2020, or the CAA, 2021. Here is the explanation of the most common grant under what you asked, given that your client has CARES grant and not an ARP: https://home.treasury.gov/policy-issues/coronavirus/assistance-for-state-local-and-tribal-government https://www.irs.gov/newsroom/cares-act-coronavirus-relief-fund-frequently-asked-questions. Forms, publications, and all applications, such as your MyFTB account, cannot be translated using this Google translation application tool. I don't think it was ever addressed as most of the time in this thread was spent with links to determine what grant somebody got, which wasn't ever the question. By Kelley R. Taylor If you are performing services as an employee, whether as an employee of the state/local government or another entity, the premium pay is also generally considered wages and is subject to withholding of applicable taxes. These FAQs were announced in IR-2021-231. I'm not sure which I should use to enter the Grant. Do we have an obligation to file a Form 1099 or other information return with respect to the payment? One exclusion is for qualified disaster relief payments under section 139 of the Internal Revenue Code (Code). Up to $10,000 in debt relief if you didn't receive a Federal Pell Grant in college and meet the income requirements.