Form 1099-G Taxable Grant (box 6) Issued in my company name. Does this get entered into TurboTax Business?

If the income was reported under the federal ID number for your business, then you should report it on your business tax return. You would report it as Other Income. If you respond with what business tax return you are filing (1120-S, 1065, 1120, sch C), we may be able to be more specific.

@ThomasM125 Thank you, and I'm sorry. I should have known to add what form we file.

It is 1065.

@ThomasM125 I file 1120S and don't know how to enter 1099G issued for business. I am using TurboTax Business version to file tax. Could you please provide more specific help? Thanks!

If the Taxable Grant was reported under the name and federal ID number for your business, then you should report it as Other Income.

Hi! My partnership received a 1099-G grant from our local government. Where do I report the taxable grant amount box 6 in Turbo Tax? Do I have to pay self employment tax for it?

It depends.  It should be reported as All Other Income in TurboTax Business. 

If the Partnership has a loss, there will be no pass through income for self-employment tax to be assessed on your individual tax return.   It is not separately taxed.

Same issue but I file Schedule C

Report it on your Schedule C as "General Income" (Business income, including income reported on Form(s) 1099-K).  

See the attached example from TurboTaxTax Home & Business (same as online TurboTax Self-Employed).

@Lee431

When I enter this grant as "other income", when I get to the state section, how do I adjust to remove that grant as it is NOT taxable under the state of NJ?

Yes, taxable grants are excluded from NJ income. As you are navigating through your NJ return in Turbo Tax, when you reach the screen that is displayed below, you may remove the amount in that box and make it blank.

I am using TurboTax Business for my S corp return.  I received a 1099-G Taxable Grant that is not taxable for my CA state return.  How do I remove it from my 100S AND have it reflected in my K1? 

Yes, if the grant was issued in your company name and EIN then you will report the grant on your TurboTax Business program.

However, if the 1099-G grant was issued using your social security number then you will enter the grant in your personal tax return Form 1040.

To enter your 1099-G Grant in personal return sign in to your TurboTax account if it is not open and follow these steps:

1. Select Income & Expenses.
2. Scroll down to Less common income and select show more.
3. Scroll to the line Miscellaneous Income, 1099-A, 1099-C, and check start.
4. On the page Let's Work on Any Miscellaneous Income scroll to the line Other reportable income and click start.
5. On the page Any Other Taxable Income select yes.
6. On the page, Other Taxable Income enter 1099-G Grant as the description and the amount of the grant.
7. Select continue.
8. Select done on the next page

@Sondra7 I have the exact same question as yours and no one has answered it correctly yet. Did you figure it out? This is driving me crazy. I added the CA  Small Business COVID-19 Relief Grant on Line 5 “Other income” line on the 1120S and then deduct it on the 100S Line 12 “Other deductions” line. It increased my ordinary business income (box 1), which is fine for federal taxes, and reduced my S-corp franchise taxes, but how do I show the adjustment on my K1 to reduce my personal CA state taxes?

@DM007No I still have not found out how to show the adjustment on my K1 to reduce the personal CA taxes.  I’m hoping that someone will offer some guidance soon.  

@Sondra7After doing hours upon hours of research, I figured it out. Here’s how it’s done:

1. Using TurboTax Business edition (step-by-step), go to Federal Taxes/Income/Other Income/All other income and under “Description”, enter: California Small Business COVID-19 Relief Grant and the total amount. Doing so will increase your K1 Part III box 1 Ordinary Business Income (loss)
2. Click on “Forms” at the top right, and then on the left navigation pane, go to California S Corporation/Form 100S p1-3. Go under State Adjustment (cont.) on line 12 “Other deductions” type "CA Relief Grant" and enter the dollar amount. Doing this will reduce your Corporate CA Franchise Taxes by 1.5% to reflect the grant deduction amount.
3. Now you need to go on your personal taxes. I use TurboTax Home & Business edition and do the following: Under State Taxes, edit your CA State Returns, click continue several times until you get to a section with the heading: “Enter amounts received pursuant to the COVID-19 Relief Grant included in federal income” and enter it in the box “Small Business COVID-19 Relief Grant Included in federal income”. This will adjust form 540 8f column B (substractions) and reduce your State Taxes to reflect the grant’s deduction

I got to this site to finally figure out that adjustments due to differences between California Schedule K-1 and IRS Schedule K-1 are entered on California Schedule CA (540)

https://www.taxact.com/support/1585/2021/california-schedule-k-1-adjustments

I hope this helps you!

@DM007 Thank you so much!  This helps immensely.  You just saved me hours of researching😀.
I’m going to try this out over the weekend. 

Thanks again!

We also received a 1099G for a COVID grant from the government in the state of California.  We have used the money as part of our operating expenses since we received it.  We included the COVID grant as "other income" under Federal taxes.  Can we itemize/categorize the operating expenditures as deductions under Federal taxes?  In that case, do we still need to include the grant money as a deduction on line 12 of California State 100S? 

Thank you so much! 

@ConsciousHumanMed You can deduct the expenses on your federal business income schedule if they are ordinary and necessary for your business. So, you enter the grant income and related expenses on your business tax schedule, be that a schedule C for a sole proprietorship (on your personal tax return) or on form 1065 (for a partnership) or form 1120-S for an S corporation. Thus, the grant income and expenses would be reflected in your business net income, so they wouldn't be entered again elsewhere on your federal or state tax return.

I noticed an error in TurboTax Premier and am hoping someone can correct it before I file.  For my California State Tax return, I am getting a deduction for the Small Business COVID Relief Grant I received.  It shows up in Schedule CA (540) Section B Line 8z when I look at it in "Forms".  However, when I look at the PDF that is going to be submitted to the FTB, the description "small business Covid relief grant" is no longer there,  only the amount is displayed.  I'm worried the return will get kicked back for missing information.  

There is another form "California Other Income Statement", Schedule CA Section B Line 8z that has the same information but it is not included in the PDF being sent to the FTB.  

Thanks in advance!

Yes, the California Other Income Statement is included in your tax filing.

So the statement in Section B, Line 8z will be included, even if not on the separate PDF.