Eligibility criteria
A COVID-19 business grant or support program payment you received from the government will not be taxable if you meet 3 essential criteria:
- The payment is received under a state or territory grant, or Australian Government support program that is formally declared by the minister, under a legislative instrument, to be treated as non-assessable non-exempt (NANE) income (see List of eligible grants and support programs).
- You carried on a business and have an aggregated turnover of less than $50 million in either the income year the payment was received or the previous income year.
- The payment was received in
- the 2020–21 or 2021–22 financial year for eligible state or territory grants, or
- the 2021–22 financial year for eligible Australian Government programs.
You must pay tax on the grant if your grant has not been formally declared as NANE or you don't meet the eligibility criteria. See Exclusions.
List of eligible grants and support programs
There are 2 types of government grant and support programs, under which COVID-19 payments to support businesses may be non-taxable (NANE):
- state and territory grants relating to the recovery from COVID-19
- Australian Government support payments established under the COVID-19 Business Assistance Program.
The minister has the power to declare which government COVID-19 business support programs are eligible grants.
State or territory grants
ACT state grants
- COVID-19 Business Support Grant
- COVID-19 Small Business Hardship Scheme
- HOMEFRONT 3
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 Costs Assistance Program Round Two – Top Up
- Business Costs Assistance Program Round Three
- Business Costs Assistance Program Round Four
- Business Costs Assistance Program Round Four – Construction
- Business Costs Assistance Program Round Five
- Business Support Fund 3
- Commercial Landlord Hardship Fund 3
- Impacted Public Events Support Program
- Impacted Public Events Support Program Round Two
- Independent Cinema Support Program
- Licensed Hospitality Venue Fund
- Licensed Hospitality Venue Fund 2021
- Licensed Hospitality Venue Fund 2021 – July Extension
- Licensed Hospitality Venue Fund 2021 – Top Up Payments
- Live Performance Support Program
- Live Performance Support Program (Presenters) Round Two
- Live Performance Support Program (Suppliers) Round Two
- 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.
For more detail about other payments you don't need to include in your tax return, see What to exclude from your business's assessable income (including certain disaster relief grants and payments).
If you're a government entity, you may need to report grants on your Taxable payments annual report (TPAR) form, see Payments and grants government entities need to report in their TPAR.
Exclusions
Not all grants or support programs announced by the government are eligible to be treated as NANE.
Grants are generally taxable, see Government grants, payments and stimulus during COVID-19 – tax implications.
The grant or support program payment is taxable if you:
- carried on a business, and
- had an aggregated turnover of $50 million or more in either the income year the payment was received or the previous income year.
The payment will be assessable as ordinary income of the business and should be declared as income in your tax return.
If the business is also registered for PAYG instalments, the amount should be reported at label T1 of the BAS. See PAYG instalments – how to complete your activity statement.
Work out if you need to pay tax on your COVID-19 business grant or support program.