7/6/2021
The Coronavirus Economic Relief for Transportation Services (CERTS) Act, authorizes the Department of the Treasury to provide grants to eligible motorcoach companies, school bus companies, passenger vessel companies, and pilotage companies that have experienced annual revenue losses of 25% or more as a result of COVID-19. Recipients must generally use the grants for payroll costs, although they may be used for certain operating expenses, including the acquisition of services and equipment needed to protect workers and customers from COVID-19, and the repayment of debt accrued to maintain payroll. Funds not used for eligible activities within one year of receipt of the grant must be returned to the Treasury Department.
The IRS posted FAQs that answered two important questions:
1. Are the grants taxable? Yes, the receipt of a CERTS Act grant is not excluded from the recipient's gross income under the Code and is taxable.
2. Are costs for which the grants are used deductible? Yes, the costs are deductible to the extent that they would otherwise deductible under the law. The tax law typically permits the payment of wages, salaries, and benefits to employees and other amounts paid to carry on a trade or business to be deducted as ordinary and necessary business expenses.
Additional non-tax information on the CERTS Act grant program can be found at the Coronavirus Economic Relief for Transportation Services (CERTS) Program page on the Department of Treasury website.
Resources:
Coronavirus Economic Relief for Transportation Services (CERTS) Frequently Asked Questions
CERTS Frequently Asked Questions *Updated* (6/29/2021) on the Department of Treasury website