California EBB grant program tax implications

[jwlamp]

I received $3,000 grant from the California EBB program towards an foundation retrofit on my primary residence (and paid the remaining $1,500 out of pocket).

I haven't received any tax forms from the program indicating I would need to report this as federal income, but when completing my state return, there is an "Incentives for Seismic Retrofit" section that states: These include loan forgiveness, grants, credits, rebates, vouchers or other financial incentives you received from the California Residential Mitigation Program or California Earthquake Authority to assist with earthquake loss mitigation that you reported as income on your federal return.

I'm confused by this and unclear how I should proceed.

[PatriciaV]

If the grant was not reported to you on Form 1099 or similar, you have nothing to report on your federal return at this time. Also, if the total proceeds of a grant are used for the stated purpose of the grant, grant income is typically not taxable.

However, you may wish to consult a local tax professional who is familiar with the EBB Grant Program to ensure you handle this situation properly.

According to the California Earthquake Authority, EBB grants are exempt from taxes at the state level. Currently, if Californians receive a mitigation grant funded by FEMA, the money is exempt from federal taxes, but if they receive a similar grant funded by the state, they must pay federal taxes on the funds.