You need to identify the specific grant, the granting authority, and the purposes for which the grant was applied for and granted for that use. You seem to indicate this was a grant for a business purpose. For instance, although most Cares Act grants are taxable income for a business for Fed filing, their State might have explicit exclusion for it.

You will find resources, such as:

CA/Fed Grant and Other Relief Taxability

https://support.taxslayerpro.com/hc/en-us/articles/360009309453-Form-1099-G-Certain-Government-Payme...