The department explained that the exemption is available for grants received under the state Small Business Relief Grant Program, which closed its application window last March 31 and exhausted its funds. The program awarded grants from $5,000 to $25,000 to Iowa small businesses that had been affected by COVID-19.
The exemption only covers state-issued grants, which still must be reported on federal income, the department said, adding that any grant exempt from federal income tax will not qualify for an additional state deduction because the amounts are already excluded from state income.
--Editing by Vincent Sherry.
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