There is an interesting Tax Court case from 1981 involving business interruption insurance and a fire down at the Piggly Wiggly in Colquitt, Georgia. The issue was whether private insurance proceeds paid to the owners, who closed the store, were subject to self-employment tax. IRS said they were. The Tax Court ruled otherwise.

https://www.leagle.com/decision/198151776ajtc4411482 

Why did Minnesota use CARES Act funds to bail out daycare providers? Were those businesses shut down completely? Or did the children just stop coming because parents and schools stayed at home, and the owners needed money to tide them over until things returned to normal?

If you ask IRS if self-employment tax should be paid on this grant money, their knee-jerk reaction will likely be the typical “if it moves, tax it.” But what if you ask them if your client qualifies for another few thousand dollars in EIC because it’s on a Schedule C?