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Where are you entering California COVID-19 Relief Grant for Sole Proprietorship Schedule C filer?

Gildardo
Level 3

California COVID-19 Relief Grant FEDERAL Tax Return:

Are you entering the grant amount on Schedule C as Business Income subject to SE tax?

Or,

Are you entering the grant amount on Other Income Statement Line 24b Other Taxable Income?

 

I have seen it both ways but got confused with the worksheet on the CALIFORNIA Tax Return that does the adjustment as Other Taxable Income only.

Thank you.

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Just-Lisa-Now-
Level 15
Level 15

Sch C, then adjusting it on CA as shown in the picture shown.  CA taxes self employment income as ordinary income,so the adjustment doesnt need to be connected to the CA Sch C.


♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

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Gildardo
Level 3

Screenshot 2022-02-24 184645.jpg

Just-Lisa-Now-
Level 15
Level 15

Sch C, then adjusting it on CA as shown in the picture shown.  CA taxes self employment income as ordinary income,so the adjustment doesnt need to be connected to the CA Sch C.


♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
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qbteachmt
Level 15

"Are you entering the grant amount on Schedule C as Business Income subject to SE tax?"

Yes, for Fed.

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Gildardo
Level 3

Thanks I was expecting to see the adjustment on Schedule CA Section B Line 3 as a business income subtraction.

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qbteachmt
Level 15

It counts as income to the Feds, and is reduced for CA.

"These grants are taxable for Federal. Any expenses paid with this grant are deductible. These grants are not taxable for California."

https://gpwcpas.com/grant-credit-loan-and-other-relief-comparison-chart/

That article has a table that has been updated for the recent SB, even though they didn't change their date at the top.

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