1099-G Taxable Grants not flowing to Sch C?

[sagarcpa]

Has anyone figured out how to get the Box 6 taxable grant to flow to the Sch C line 5.  Everything I do produces an error.  Is this a program glitch or truly should be reported as other income?

[Just-Lisa-Now- · Accepted solution]

If youre confident it should be business income, just enter it on Sch C - Other Income below Line 5         skip the 1099 entry 

[qbteachmt]

It's business income, it's subject to SE, and I don't think it occurred to the programmers to be able to link that form, that box, to the Sched C.

[Just-Lisa-Now-]

Ohhhh, I see, you can link to Sch C if you check that box for trade or business...no  guess not, thats for Box 2 of the 1099g...nevermind

[qbteachmt]

"no guess not, thats for Box 2 of the 1099g...nevermind"

Ha ha ha...I've looked at your topics on this in the past, and you've ridden that merry-go-round before...

[Just-Lisa-Now-]

when would box 2 of a 1099g ever flow to a Sch C? Im trying to think of a situation where wed see that happen.

[sagarcpa]

Exactly, I was trying to get it to flow to Sch C, line 6 as I know they used this grant $$ to purchase COVID protection (plexiglass, etc) and this looked like other screens in the program that you "link" items to but it keeps giving me an error that I need something in box 2???  Nothing to do with refunds...I did as Lisa suggested and put directly on Sch C under line 5 and if there is ever a matching notice I can send them the error from Proseries!  Thanks to both of you for the discussion.

[qbteachmt]

"when would box 2 of a 1099g ever flow to a Sch C? Im trying to think of a situation where wed see that happen."

(edit: I first read this backwards).

Box 2 would be tax refunds, such as when someone treats withholding as business related and gets the refund.

Box 6 is these business grants.

The Feds gave CARES money to States, which granted business or to counties, which granted to businesses, or to cities, which granted to businesses. My State is getting another $3 billion. I've had this tab open over a year, now:

https://commerce.mt.gov/Montana-Coronavirus-Relief/Awarded-Grants

For the $10m given for Live Entertainment grants. For instance, you would see a DJ got it. That's reported on Sched C.

https://www.irs.gov/newsroom/cares-act-coronavirus-relief-fund-frequently-asked-questions

"Q. If governments use Fund payments as described in the Fund Guidance to establish a grant program to support businesses, would those funds be considered gross income taxable to a business receiving the grant under the Internal Revenue Code (Code)?

A. Yes. The receipt of a government grant by a business generally is not excluded from the business's gross income under the Code and therefore is taxable. However, a grant made by the government of a federally recognized Indian tribe to a member to expand an Indian-owned business on or near reservations is excluded from the member's gross income under the general welfare exclusion."

Some States might exempt it, depending on the program.

[HOPE2]

Hi and thanks for help. I followed up this conversation, I would finally like to know the 1099-G taxable grants ( box 6 has an amount for $5000) which client received should go line 1 on sch C or line 5?

And it is nontaxable for California state, how can adjust it on Schedule CA 540 , by a override in section B , line 3 as a subtraction, am I right?

[qbteachmt]

@HOPE2 

Your own topic is here:

https://proconnect.intuit.com/community/proseries-tax-discussions/discussion/grant-5000-lendistry-in...

You should read it again, because we addressed Sched C there. You should keep to that one topic, and not post in this topic from the prior tax year, because the program for preparing 2020 taxes will be different than preparing 2021 taxes. This topic is from the prior tax year. You can see that the latest reply is March 2021. Thanks.