Managing costs

Has your business received support in tough times?

What are the tax implications of a business support grant? Is it assessable or non-assessable income?

30 January 2024

Many small businesses across Australia may be experiencing challenges due to recent weather events, so worrying about meeting your tax obligations will not be your highest priority. However, it is important to understand the tax implications of a business support grant.

You may have received a grant to assist your business in navigating through this or another challenging time. When it’s time to lodge your tax return, you’ll need to know if your grant is assessable or non-assessable income.

Grants are generally treated as assessable income. However, some business support grants are formally declared non-assessable non-exempt (NANE) income. This means you don’t need to include these in your tax return if you meet certain eligibility requirements.

You can check what non-assessable non-exempt government grants may be excluded from your tax return. For example, some natural disaster grants are considered NANE income, subject to eligibility criteria.

If you included a grant that’s considered NANE in your 2022–23 tax return, you can amend your return.

Remember, you can only claim deductions for expenses associated with NANE grants if they relate directly to earning assessable income. Expenses may include things like wages, rent, and utilities. You can’t claim expenses related to obtaining the grant, such as accountant fees.

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