May 14, 2022
In December, as part of our write-up on North Carolina’s annual budget legislation, we wrote about North Carolina’s Business Recovery Grant program. Because significant funds remained after Phase 1, the legislature revised the rules of the program, and the Governor signed that legislation into law in March 2022. As a result, Phase 2 of the program has been launched, and applications started being accepted on May 2. Here is a comparison of Phase 1 to Phase 2 issued by the Department of Revenue.
Most of the same rules apply, but the funds are now available for more businesses. The application period will remain open until June 1, 2022. There are still two types of grants:
- The Hospitality Grant is for businesses that were classified with NAICS Code 71 or 72 between March 1, 2019 and February 28, 2021.
- The Reimbursement Grant is for all other businesses, and now it’s available even if the business received COVID relief.
Economic loss is still defined as a 20% decrease in gross receipts for the period March 1, 2020 through February 28, 2021 compared to the equivalent time frame during the preceding 12-month period. The business must be subject to NC income tax.
If a business already received a Phase 1 grant, they may still be eligible for a grant in Phase 2. The total amount a business can receive between Phase 1 and Phase 2 is still $500,000. Businesses must meet the following criteria to be eligible for Phase 2:
- Have gross receipts that were not reported on Form E-50O;
- Have gross receipts that were not reported on Form 1065;
- They received a Phase I grant that was less than $500,000;
- There must be at least a 20% decline in gross receipts between the periods of March 1, 2019 through February 29, 2020 to March 1, 2020 to February 28, 2021.
The grant amount is the lesser of $500,000 or 20% of the economic loss if the business did not receive an award from COVID-19 Job Retention Program, EIDL, PPP, Restaurant Realization Fund or the Shuttered Venue Operators Grant Program. If a business did receive one of these other awards, the grant amount is the lesser of $500,000 or 10% of the economic loss.
Businesses can learn more about the program at the DOR’s web page dedicated to this program here.
Stay updated with JPS.