Do individual grants count as reportable income to the IRS?
I'm a disabled artist who is on SSDI and works part-time when my health allows. I currently have a disability based project for which I am trying to find funding. The full grant amount would go towards the project: paying the artists, project costs, performance space rental, etc. None of the grant money would be going towards paying myself. The grants are small enough as it is, and paying myself is the last thing that would be on the list. I have budget spreadsheets, and I keep excellent records to show where the money is going. I know I'm going to walk away from this without any compensation, and that's fine with me because this project is important and producing it is all I care about.
Here's my problem: I can't accept an individual grant if it counts as income (even though I wouldn't be pocketing any of the money) because it will mess up my SSDI, and I could risk losing my benefits. The IRS website says that individual grants are taxable unless they meet one of the requirements listed. My project would fit in this requirement: "The grant's purpose is to achieve a specific objective, produce a report or similar product, or improve or enhance a literary, artistic, musical, scientific, teaching, or similar capacity, skill or talent of the grantee." But in my research, I've come across so many different answers as to whether it counts as income, and I don't want to risk losing my healthcare.
TLDR:
If an individual grant meets the IRS requirement to be deemed not taxable, does it still count as income that I have to report, even if I pocket none of the funds?
Posted Jul 13, 2025, 5:07 AM UTC