Yes, funds from the EIDL are reported as taxable business income on your tax return unless the IRS decides to make a general welfare exception. I have not seen that come through yet. I agree with Thomas that is seems likely. The IRS does not open until February 12 and has all season to decide if it wants to make an exception.
However, you can lower your tax liability by deducting any expenses covered by the use of these funds.
@sjlocke
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