1099 G for Business grant

[IlzeL]

I talked to one of the tax pros through customer service and was advised to enter 1099g - Certain Government Payments - Taxable Grants- into Other Business income section which seem wrong, since there is a form 1099 G for personal side, but it only gives an option to report it to Taxpayer or spouse  SS number instead of reporting it to business TIN. Considering that with last years financial help to millions of small businesses will be receiving this grant money, it seems to be a failure on software side that this form is omitted from business section.

Please update your software

[AnnetteB6]

Entering the information reported on the actual Form 1099-G in the personal side of the tax return is just a means to get the information reported in the right place on the tax return.  The data on the form is not transmitted with the return, only the parts transferred to the Form 1040 showing the taxable amounts.

Similarly, as long as you have reported the taxable grant income on your Schedule C with your other business income, then that is all that is required.  The IRS already has copies of the actual Form 1099-G and will match the income reported on your return with the income that they know about based on income forms submitted with your business Federal ID number.  The information from the form itself is not required to be included with the tax return.

Thank you for the suggestion that the software be updated, but since the only information truly needed for the return is the amount of the taxable income, it is unlikely that it will be changed.

[cc2llc2]

i agree update the software

[Anonymous]

You forgot to mentiont that TurboTax does not list Grants, on the business section.  So the income should be listed under uncommon income on the schedule C.

[rculler]

I agree with @IlzeL and others who say this is a failure in the software. We pay extra for software that will allow us to accurately report our income and expenses and therefore it should provide us with the tools to do that.

Businesses receive government grants all of the time and so this is not an uncommon income situation. I would also point out that TurboTax already has a means for linking 1099-Misc and 1099-NEC to business income so this is not something new.

I believe we are owed a better explanation and/or an update.

[MarylandRetriever]

This is my question too, but need more clarity. I have entered the information for the 1099-G (taxable grants) on the Personal Income section. Do I ALSO enter the identical amount in OTHER INCOME in Schedule C? I do not want to enter the income TWICE. Please clarify.

[MarylandRetriever]

Following up on my own question about where to enter the 1099-G taxable grant to my small business, should I NOT enter it in PERSONAL INCOME as a 1099-G? And, simply enter it as OTHER INCOME with no other TIN or indication that it is linked to a 1099-G? Thank you for clarifying.

[HelenC12]

Don't enter your 1099-G in the personal income section. Enter is at uncommon income on Schedule C.  The IRS already has copies of the actual Form 1099-G and will match the income reported on your return with the income that they know about based on income forms submitted with your business Federal ID number.  The information from the form itself is not required to be included with the tax return. 

• On Schedule C, report on line 6 business income not reported elsewhere in Part I like Other kinds of miscellaneous business income.

Source: Previous post 

[SONJA22]

Where do I report form 1099-G on Schedule F?

[RobertB4444]

@SONJA22 You're going to enter the amount from box 6 on your 1099-G directly into the schedule F as OTHER INCOME.

1. Go to Farm Income and Expenses.  
2. On the Farm Summary, click Edit next to your farm name. 
3. On the next screen, Your Farming Income and  Expenses, in the Farm Income section, click on the Start/Update box next to Other farm income.  
4. Enter the amount in Form 1099-G, box 6 on the next screen, Any Other Income or Credits?  

[MrsDoolittle]

We did this, but I am not at ALL comfortable with this.  WHY is there not a simple, complete form 1099-G that we can enter?  A form that simply contains all the possible lines, where we can enter the information and fill it out.  It seems to me that this will create a red flag for the IRS.  I mean, they haven't even scanned in LAST YEARS 2020 taxes yet, for God's sake! Why make this that much more difficult??!!

I pay waaaay too much money for this program to have to encounter an  issue that took me 45 minutes to register, sign in and search for an answer.

TT really sucks for any farming issues.

[nnorukam]

I agree, Intuit need to update turbotax for business grant, adding it as order income as part of farm income is in the wrong place and should not be personal income either,

Lucy

[roshanip]

But if we include this grant in Schedule C other iincome , wouldn't it be counted to wards SE tax also? 

[JamesG1]

Grant income reported as Schedule C other income would increase self-employment tax.  This is what the IRS intends.

This IRS FAQ states:

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. 

@roshanip

[alexander6]

I've been through this recently too - If the grant is a business grant then the income should be treated as business income.  Look on the 1099 as one indication of whether it is a business grant - was the 1099 issued to a business, or to an individual doing business as xxx, etc?  Another indication is what were the stated purposes of the grant, and what was the funding used for?  If for business purposes, and the funding was used for business related expenditures, then these are further indications that the grant should be treated as business income.  If the grant is specifically related to a farm business, then the income should be reported on the Schedule F.  If the grant is for an ordinary (non-farm) business, then the income should be reported on the Schedule C.

But in answer to roshanip's question - yes, the additional business income would correspondingly increase the self employment tax.  You might be tempted (as I was) to put it on the personal side (1040) and thus avoid additional SE tax, but if the grant was received for business purposes, I've been told it would be incorrect to do so.  Also, of course, don't fail to write off any expenses you incurred in carrying out the terms of the grant.  These can in some cases be written off in the same year in which the grant was received, and in other cases, might be depreciated over time.  That might be your choice depending on the circumstances. 

Good luck.  FWIW, I think TurboTax could be better at handling these situations.