Yes, the NJEDA Grant is taxable income. Per the IRS CARES Act Coronavirus Relief Fund FAQs:
Q. If governments use Fund payments as described in the Fund Guidance to establish a grant program to support businesses, would those funds be considered gross income taxable to a business receiving the grant under the Internal Revenue Code (Code)?
A. Yes. The receipt of a government grant by a business generally is not excluded from the business's gross income under the Code and therefore is taxable.
You are correct that you would report this grant income in TurboTax under Other Income. As you work through your New Jersey State return, you will be asked to allocate your federal income to New Jersey. In that section, you will be able to eliminate the grant income from the income reported to your state.
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