Were you a contractor for this or were you the recipient based on your income? Also, which state was this for?
In general, if you are a contractor or not the beneficiary of the grant (you weren't the one that qualified based on income) and you profited from this, then you would enter it as income. Then yes, anyone you subcontract with would also have to pay taxes on that income, however, you would take a deduction for the payments you made to the subcontractors. You would need to issue the subcontractors a 1099-NEC for the work done and then you would take a deduction on your Schedule C or other Business return.
If you are the individual benefiting from a grant that was given based on income, need and location, this would not be a taxable grant to you.
Grants to Individuals
Grants to Organizations
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