United States

North Carolina Job Retention Grant program applications due Sept. 1

TAX ALERT  | 

On July 1, 2020, North Carolina Gov. Roy Cooper signed House Bill 1023 providing for a number of COVID-19 relief measures to state businesses, including a new Job Retention Grant administered by the North Carolina Economic Investment Committee. The purpose of the grants are to provide support to businesses that experienced disruption during the pandemic, but that did not participate in the federal Paycheck Protection Program (PPP), the federal Main Street Lending Program or the North Carolina Rapid Recovery Loan Program. Eligible taxpayers must apply by Sept. 1, 2020.

General eligibility and grant amounts

The grant program is available to private businesses and certain nonprofits. The business must have employed at least 90% of the number of full-time employees during the March 1, 2020 through May 31, 2020 period (COVID period) as the business employed for the pay period ending on or about Feb. 28, 2020. Additionally, the business must demonstrate that it experienced an “economic loss” of 10% of sales during the COVID period compared with the same period in 2019, or for nonprofits, 10% of gross receipts. Businesses that did not exist during the COVID period in 2019 are not eligible for the grant program. Finally, the business could not have participated in other relief programs as described above, even if for example, the business expects to repay state rapid recovery loans.  

The maximum grant available is up to two months of average monthly payroll costs form 2019, plus an additional 25%. The grant is capped at $250,000 per applicant. Total grants awarded cannot exceed the Job Retention Grant’s program funding of $15,000,000. If total grants requested by all qualified applicants exceeds that amount, each grant will be reduced proportionally to allow for all applicants to benefit. 

Takeaways

Business that may qualify for the grant program should begin preparing as soon as possible. Applications require a number of documents and support, including payroll information, state wage reports and federal wage statements. There are also a number of nuanced considerations including calculating eligible payroll costs and determining whether there are any other excluding qualifications to receive the grants. 

The Sept. 1, 2020 application deadline is quickly approaching. North Carolina businesses that did not receive federal PPP funds, participate in the federal Main Street Lending Program or receive state rapid recovery loans should discuss the North Carolina Job Retention Grant program with their tax advisers.

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