Is the grant from the county government a COVID-19 related disaster payment? This analysis states:
The COVID-19 pandemic is a qualified disaster, so federal, state, and local government grants to individuals for COVID-19-related expenses are tax-free. This would include, for example, the $25 billion in new rental assistance authorized by the recent enactment of the new stimulus bill that was signed into law by the president on December 27, 2020.
In TurboTax Business for an 1120S, non-taxable income will be reported as a reconciliation item on the M-1 Worksheet. The income will be listed under Permanent Items (tax-exempt income).
A Small Business Administration (SBA) Economic Injury Disaster Loan (EIDL) has to be paid back. Loans that have to be paid back are not taxable income to the borrower and are reported as an outstanding loan.
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