Yes, I received a 1099G from the State Forestry for my part in a Community Firewise Grant. Some residence in my community did not receive any forms as the work was covered by the State Forestry contract. I am a tax preparer for 1040 individual and have always entered these transactions in Other Income not subject to SE tax with an adjusting entry for the expenses incurred. Is this acceptable with a statement that the funds are from a Gov't Grant, promotes the general welfare as a Community activity and is not compensation? Neighbors are asking my advice and I wanted to be sure that my approach is correct.