In order to help small businesses affected by the COVID-19 epidemic, the Tennessee Business Relief Program was introduced in 2020. The initiative offered incentives to qualified firms to aid in their recovery from the pandemic’s effects. The TN Business Relief Grant’s tax treatment, however, is a matter of concern.
The TN Business Relief Grant is taxable, so the answer is yes. Any grant or financial aid given to a firm is regarded as income and as such is taxed at the federal level. A business must include the grant money it has received as income on its tax return. Both state and federal income taxes are affected by this.
The Tennessee COVID Grants and Tennessee SERG are similarly taxed. These funds were made available to anyone who had been impacted by the epidemic in order to help them through these trying times. Similar to the TN Business Relief Grant, these grants must be reported as income on the tax return and are, therefore, taxed at the federal level.
The Tennessee Housing Development Authority (THDA) program, on the other hand, does not tax rent assistance received by a business for rent payments. To assist renters and landlords impacted by the epidemic, the THDA program was started. Rent payments for qualified renters were covered by the scheme through direct payments to landlords. This help, however, is not regarded as taxable income and is exempt from filing a tax return.
The Maine Economic Recovery Grant is another program that was developed to offer financial support to small businesses afflicted by the epidemic, in addition to the TN Business Relief Grant. The Maine Economic Recovery Grant is taxable, nevertheless, and must be shown as income on the tax return, much like the TN Business Relief Grant.
Finally, it’s critical that both firms and individuals are aware of the tax repercussions of accepting financial aid during the pandemic. Assistance obtained through the THDA program is not taxable, however the TN Business Relief Grant, TN COVID Grants, and TN SERG are. To make sure that the financial aid received is accurately reported on the tax return, it is advised to speak with a tax expert.