This amount does not appear to be includable as taxable income for federal or state purposes. Qualified disaster relief payments include payments from state authorities for qualified disasters according to IRC section 139(b)(4). Qualified disasters include disasters for which state governments determine that relief payments are warranted. I.R.C. section 139(c)(4).
Furthermore, qualified disaster mitigation payments are not taxable under IRC section 139(g)(1). Qualified disaster mitigation payments are payments for the “benefit of the owner of any property for hazard mitigation with respect to such property” that does not pertain to the sale or disposition of that property. I.R.C. section 139(g)(2).
Here, payments to landlords from IL could be construed as either a qualified disaster relief payment or qualified disaster mitigation payment. Guidance from state authorities could shed light on this question as to whether the state payment was made in response to a disaster warranting relief. As such, the IL payments to landlords does not seem to be a includable as taxable income for federal or state purposes, since the IL Housing Authority classifies the payments to landlords as "2020 Emergency Rental Assistance Program."
https://www.ihda.org/about-ihda/covid-19-housing-resources-information/
