Is Government Money Taxable?
Most of it isn’t but the real answer to this is the same answer to any good question, œIt Depends. Some government grants are taxable and some are not. If you get a government grant to start a business, I would assume you would have to treat that as taxable income but you would probably not pay any taxes on it because you would use the money to buy business deductible items like computers, office space, advertising etc. government grants and scholarships in excess of tuition, fees, books, supplies, and equipment are considered taxable income. government grants given to veterans not taxable. A lot of government grants given out to pay your energy bills or help pay your mortgage are not taxable. See IRS Publication 525 Taxable and Nontaxable Income available on the web at www.irs.gov/pub/irs-pdf/p525.pdf