Your Federal/State Grants Received in 2021 Are Taxed?

There were various federal and state programs that assisted small businesses and individuals in 2021 . Let's take a look at which ones might be taxable (note: the following are only federal, the rules of each state will be different, ask your accountant for details):

The federal government gave small businesses and 1099 self-employed individuals several types of grants and assistance:

PPP - Tax Exempt

EIDL - Tax Exempt

ERC - Tax Exempt

New York gave several grants and assistance to small businesses and 1099 self-employed individuals:

New York State COVID-19 Pandemic Small Business Recovery Grant Program - Federally Taxed, NYS Tax Exempt

NYC Small Business Resilience Grant - TBD, waiting for further guidance

New York State grants to individuals:

Unemployment benefits - there is no tax-free amount this year like last year, all unemployment benefits are taxed

NYS Excluded Workers Fund - Federally Taxed, NYS Taxed