Updated on 7/6/2022
If the grant you are looking for is not specifically listed below, note the general rule for grants, is they are ordinarily to be included in gross income, unless specifically identified in legislation as being non-taxable.
| Program Summary | Required to be paid back? | Taxable for Federal/ California | ||
| Economic Injury Disaster (EIDL) Advance | Established by the Economic Aid to Hard-Hit Small Businesses. Administered by the SBA. EIDL Advance funds were calculated based on the number of employees indicated on an applicant’s EIDL loan (see below). The funds were calculated as $1,000 per employee, up to a maximum of $10,000. Recipients did not have to be approved for an EIDL loan to receive the EIDL Advance. The amount of the loan Advance was deducted from total loan eligibility. Businesses who received an EIDL Advance in addition to the PPP loan will no longer have to reduce the forgiveness amount of the PPP loan by the EIDL Advance amount. https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/covid-19-economic-injury-disaster-loans For Frequently Asked Questions related to the EIDL Advance see here. EIDL loan applications are still being processed, but funds allocated to EIDL Advances have been fully allocated and are no longer available. | Although these were called ‘Advances’ they are actually grants and do not need to be paid back. | Not taxable for Federal and the expenses paid with this advance are deductible. Per Bill AB 80, this is not taxable for California and the expenses are fully deductible. | |
| Economic Injury Disaster (EIDL) Loan | Established by the Economic Aid to Hard-Hit Small Businesses. Administered by the SBA. For eligible applicants, loan amounts are equal to six months of working capital. Loan applications prior to April 7, 2021 had an original maximum loan amount of $150,000. For loan applications on or after April 6, 2021 the SBA increased the loan limit to up to 24 months with a maximum loan amount of $500,000. Applicants who applied prior to April 7, 2021 and were approved for the lower amount might be eligible for an increase based on this change. https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/covid-19-economic-injury-disaster-loans For Frequently Asked Questions related to the EIDL loan see here. Note EIDL loans under $25,000 are considered ‘unsecured’ and do not require collateral. EIDL loans over $25,000 will require collateral. The SBA secures collateral by filing a blanket UCC-1 lien on the business. A handling charge of $100 will be applied in order to file the lien with the appropriate government agencies. SBA is currently accepting new EIDL applications from all qualified small businesses, including agricultural businesses, and private nonprofit organizations. Applicants for an EIDL loan may apply for PPP and SVOG, but there can’t be any overlap in purpose, or qualifying costs. | Yes Maturity: 30 years Payments of both interest and principal are deferred for one year. Interest continues to accrue during that first year. | Since these are regular loans that are to be repaid, and amounts received are not taxable for Federal and the expenses paid with this loan are deductible. California is the same as Federal. | |
| Paycheck Protection Program (PPP) Loan | Established by the CARES Act, eligible entities could apply for loan amounts based on average monthly payroll costs. Eligible businesses who received PPP loans can apply for forgiveness of up to the entire loan amount based on a formula. The amount not forgiven is subject to the following loan terms: Interest Rate: 1% Maturity: 2 years if issued prior to June 5, 2020. Maturity: 5 years if issued after June 5, 2020. First Draw PPP borrowers may be eligible for a Second Draw PPP loan and apply for a SVOG if they received a PPP loan prior to 12/27/20. They may also apply for an EIDL loan, but there can’t be any overlap in purpose, or qualifying costs. https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program To check if an entity has received a PPP loan and the status of the loan forgiveness click here. | The forgiven portion is calculated based on a formula. The forgiven amount does not need to be paid back. Any unforgiven amount acts like any other loan and will need to be repaid. | The forgiven portion is not taxable for Federal and the expenses paid with this loan are deductible. The forgiven portion is not taxable for California and there is an all or nothing test to determine if the expenses paid for with forgiven loan proceeds are deductible. To be eligible to deduct the expenses, the entity must meet the 25% gross receipts test. Note as of 7/5/2022 the governor of California signed AB 194, which extends the California treatment of forgiven PPP loans. So forgiven loans received after 3/31/2021 are also non-taxable, and the deductibility of the expenses is dependent on meeting the 25% gross receipts test set by AB 80. | |
| CA Relief Grant | Eligible applicants were scored based on COVID-19 impact factors. Grants were awarded based on the following: $ 5,000 For annual gross revenue between $1,000 and $100,000 $15,000 For annual gross revenue between $100,000 and $1 million $25,000 For annual gross revenue between $1 mil. and $2.5 million https://www.californiasbdc.org/covid-19-relief-grant Round 3 for applying for this program closed on March 11, 2021. The Round 4 application window spans from March 16, 2021 – March 23, 2021. Applicants who applied in any round are automatically transferred for consideration to the next round. The funding for this program has been expanded. Therefore, as of the date of this posting, grants will continue to be awarded to eligible applicants who applied during the application windows. | These amounts do not need to be paid back. | These grants are taxable for Federal. Any expenses paid with this grant are deductible. These grants are taxable for California and the expenses are not deductible. | |
| Shuttered Venue Operators (SVO) Grant Program | Established by the Economic Aid to Hard-Hit Small Businesses. Administered by the SBA. https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/shuttered-venue-operators-grant Eligible applicants can qualify for a grant equal to 45% of gross earned revenue, up to a maximum amount of $10 million. To qualify for a SVO Grant, the business must be engaged in one of the following: * Live venue operator or promoter, theatrical producer, or live performing arts organization operator; * Relevant museum, zoo, or aquariums; * Motion picture theater operator; *Talent representative. SBA is not yet accepting applications. When applications open, you can apply here. Applicants for a SVOG are not eligible to apply for a PPP loan if applying for SVO, but may apply for EIDL. Applicants for a SVOG are not eligible to apply for a the RRF. | Grants must be used for eligible expenses from March 1, 2020 through December 31, 2021. Additional time is available if a second grant is received. Unused amounts must be returned. | Amounts not repaid are not taxable for Federal and the expenses paid are deductible. SB 113 Conforms California to Federal. I.e. These payments are not taxable to California and the expenses are deductible. | |
| Small Business Debt Relief | Established by the CARES Act and revised by the Economic Aid Act, the SBA is authorized to automatically pay 6 months of principal and interest, and any associated fees that borrowers owe for all 7(a), 504, and Microloans (excluding PPP loans and EIDL loans) up through September 27, 2020 even if not fully disbursed. The borrower did not need to apply for this assistance. https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/sba-debt-relief | These amounts do not need to be repaid. | Any amounts the SBA paid on behalf of the borrower are not taxable for Federal. California does not conform. These amounts are taxable for California. | |
| SBA Express Bridge Loans (EBL) | This program authorized SBA Express Lenders to provide expedited SBA-guaranteed bridge loan financing on an emergency basis in amounts up to $25,000 while those small businesses apply for and await long-term financing (including through SBA’s direct Disaster Loan Program). EBL loans can only be approved through March 13, 2021. https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/sba-express-bridge-loans For a more detailed guide to this program see here. | Amount is to be repaid over 7 years. Because the maximum amount of an EBL loan is $25K, lenders are not required to take collateral. EBL loans are otherwise subject to the same fees as required for 7(a) loans. | Since these are regular loans that are to be repaid, any amounts received are not taxable for Federal and the expenses paid with this loan are deductible. California treatment is the same as Federal. | |
| Employee Retention Credit (ERC) | Established by the CARES Act, the ERC provides a fully refundable tax credit which can be taken against certain employer payroll taxes. The ERC is not an income tax credit; it is a payroll tax credit and is ultimately reflected on Form 941. If the employer’s payroll tax deposits are not sufficient to cover the credit, the employer may get an advance payment from the IRS. https://www.irs.gov/newsroom/covid-19-related-employee-retention-credits-general-information-faqs The American Rescue Plan Act of 2021 has expanded the period this credit can be claimed through the end of 2021. | These amounts do not need to be paid back. | The credit is taxable for Federal purposes, which is achieved by reducing deductions by the amount of credit taken for the year the credit was claimed. When the credit amount is received it is nontaxable. California changed their stance in March 2023. The ERC Refund is now non-taxable and the expenses are deductible. To read our full article on this click here. | |
| Paid Family Leave Credits and Paid Sick Leave Credits | The American Rescue Plan Act of 2021 (ARP) singed by the President on March 11, 2021 extended the Families First Coronavirus Response Act (FFCRA) and expanded the provisions for eligible employers to claim refundable tax credits to reimburse them for the cost of providing paid sick and family leave to their employees due to COVID-19. Under the ARP provisions, an eligible employer can claim a credit for eligible wages for the period: April 1, 2021 through September 30, 2021. For more information about these credits click here. | These amounts do not need to be paid back. | The credits are taxable for Federal purposes and the related expenses are deductible. For California purposes these credits are also taxable and the related expenses are deductible. | |
| Economic Impact Payments (Stimulus Checks) | There have been three rounds of Economic Impact Payments with the third round currently underway. These are all advance payments of a tax credit. Established by the CARES Act, the first round of Economic Impact Payments resulted in $1,200 payments per qualifying individual plus $500 per qualifying child under age 17 as of 12/31/2020. The amount the taxpayer is ultimately eligible for will be reconciled on the 2020 tax return. Established by the Additional Coronavirus Response and Relief Act, the second round of Economic Impact Payments resulted in $600 per taxpayer ($1,200 for married individuals filing jointly) plus $600 per dependent under age 17 as of 12/31/2020. The amount the taxpayer is ultimately eligible for will be reconciled on the 2020 tax return. Established by the American Rescue Plan Act of 2021, the third round of Economic Impact Payments resulted in $1,400 per taxpayer ($2,800 for married individuals filing jointly) plus $1,400 per dependent. Unlike the previous two stimulus programs, eligible dependents includes any dependent that can be claimed by the taxpayer on their return. The mount the taxpayer is ultimately eligible for will be reconciled on the 2021 tax return. | If when ultimately reconciled on the corresponding tax return it turns out the taxpayer was entitled to less than was paid to them, the amounts do not need to be repaid. Taxpayers who received less than the amount they were eligible for will claim the additional credit on their 2020 tax return. | These are advance payments of a tax credit and the credit is not taxable for Federal purposes. These amounts are also not subject to California Income Tax. | |
| Restaurant Revitalization Fund (RRF) | Established by the American Rescue Plan Act of 2021. Administered by the SBA. Eligible businesses can apply for grants up to a maximum of $5 million for restaurants and $10 million for restaurant groups, limited to the decline in gross revenue between 2020 and 2019. Eligible businesses can apply for both the PPP and RRF program, however the RRF grant amount will be reduced by the amount of PPP loans received (first and second rounds). A business can not apply for the RRF program if it applies for the SVO Grant program. For a more detailed guide to this program see here. | The amounts received must be used to pay for eligible expenses within the covered period that spans from February 15, 2020 to December 31, 2021. Any unused funds must be paid back. | Not taxable for Federal and eligible expenses paid with funds received are deductible. SB 113 Conforms California to Federal. I.e. These payments are not taxable to California and the expenses are deductible. | |
| Federal Unemployment Compensation | Established by the CARES Act, eligible individuals were able to receive Pandemic Unemployment Assistance of $600 per week in addition to their normal weekly benefit for up to 16 weeks from March 29, 2020 through July 25, 2020. Established by the Lost Wages Assistance program through a Presidential memorandum, eligible individuals could received $300 per week in addition to their normal weekly benefit for up to 3 weeks. https://edd.ca.gov/about_edd/pdf/news-20-41.pdf Established by the Additional Coronavirus Response and Relief Act, eligible individuals were able to claim an additional $300 per week for a total of 11 weeks from December 27, 2020 through March 13, 2021. https://www.edd.ca.gov/about_edd/coronavirus-2019/cares-act.htm No application process was needed to apply for these benefits. The additional amounts were automatically added to the federal unemployment compensation for eligible individuals. | These amounts do not need to be paid back. | Unemployment compensation is usually taxable for Federal. Established by the American Rescue Plan Act of 2021, up to $10,200 of unemployment will be tax exempt for households with up to $150,000 of income. California does not tax unemployment benefits so these amounts are not subject to California Income Tax. |
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