Coronavirus Economic Relief for Transportation Services (CERTS) FAQs

Established by the Consolidated Appropriations Act of 2021, the CERTS Program was created to support transportation service providers affected by COVID-19. This includes motor coach, school bus, passenger vessel, and pilot vessel companies.
The CERTS Program provides eligible transportation service companies with grants to help to maintain payroll, hire back employees who may have been laid off, and cover applicable overhead and operational expenses. This week, IRS posted FAQs that answer two important questions:

  • Are the grants taxable? Yes, the receipt of a CERTS Act grant is not excluded from the recipient’s gross income under the Internal Revenue Code and therefore is taxable.
  • Are costs for which the grants are used deductible? Yes, the costs are deductible to the extent that they are otherwise deductible under the law. Tax law generally 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.