Corduroy Frog Posted September 3, 2021 Report Share Posted September 3, 2021 It is commonplace in some states that Grants from Federal Govt are Exempt for Federal Purposes and Taxable for State Purposes. Conversely, in these areas Grants from the State are Taxable for Federal Purposes but Exempt for State purposes. Sorta a reverse flip. This is true in Alabama, but can't say this is true everywhere - I haven't filed everywhere and even so, I dunno. I'm dealing with a Kentucky customer who received a $32,000 economic (COVID) grant from the City of Louisville. Can anyone tell me where to look in the IRS code to determine whether this is exempt or taxable? If I know where to look, I'll find out for myself. For what it's worth, I'll have to file Kentucky taxes for this person as well. Kentucky website confirms the taxability of such a grant will follow the Federal. Thanks in advance. Quote Link to comment Share on other sites More sharing options...
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