Government grants or support payments are taxable by default, and will count as income in your tax return unless they are specifically categorised otherwise.
It has been confirmed that certain state and territory COVID-19 business support programs are being treated as non-assessable non-exempt (NANE) income in this financial year, if they meet the following criteria:
- Any Australian Government support payments established under the COVID-19 Business Assistance Program
- Certain State and Territory grants relating to the recovery from COVID-19 (as listed below)
ACT State Grants
- COVID-19 Business Support Grant
NSW State Grants
- 2021 COVID-19 business grant
- 2021 COVID-19 JobSaver payment
- 2021 COVID-19 micro-business grant
- NSW Accommodation Support Grant
- Commercial Landlord Hardship Grant
- NSW Festival Relaunch Package
- NSW Performing Arts COVID Support Package
- NSW Performing Arts Relaunch Package
- 2022 Small Business Support Program
QLD State Grants
- 2021 COVID-19 Business Support Grants
SA State Grants
- COVID-19 Additional Business Support Grant
- COVID-19 Business Hardship Grant
- COVID-19 Business Support Grant – July 2021
- COVID-19 Tourism and Hospitality Support Grant
VIC State Grants
- Alpine Business Fund
- Alpine Resorts Support Program (Streams 1, 2 and 3)
- Business Continuity Fund
- Business Costs Assistance Program Round Two
- Business Costs Assistance Program Round Two – July Extension
- Business Support Fund 3
- Impacted Public Events Support Program
- Independent Cinema Support Program
- Licensed Hospitality Venue Fund
- Licensed Hospitality Venue Fund 2021
- Licensed Hospitality Venue Fund 2021 – July Extension
- Live Performance Support Program
- Melbourne City Recovery Fund – Small business reactivation grants
- Outdoor Eating and Entertainment Package
- Small Business COVID Hardship Fund
- Sole Trader Support Fund
- Sustainable Event Business Program
These payments will be non-assessable non-exempt (NANE) income for tax purposes if they are received under an eligible grant or support program and the eligibility criteria was met.
It’s important to note that not all Covid-19 grants or support programs that have been announced are eligible for NANE income treatment and some grants are taxable. Please speak to your tax agent for individual advice and ensure you disclose any income you received in the form of a support payment or grant.
The ATO will update their list of tax-free government grants as new stimulus packages are added. Click here to see their list.
