Hi Ronny! If you are referring to the Working Washington Grant, a state program to help small businesses that have struggled due to Covid-19, then according to the Washington State Dept. of Commerce these grants are not subject to business and occupation (B&O) tax, public utility tax, or retail sales tax. See Washington Grant FAQs . However, with regard to your Federal return this grant should be included under your business income on the Schedule C. The IRS states that "The receipt of a government grant by a business generally is not excluded from the business's gross income under the Code and therefore is taxable."(see Corona Virus Relief Fund FAQs). I hope that you find these resources helpful!
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