FAQs | Job Retention Grant

We are no longer accepting applications to the Job Retention Grant program (JRG).  But, we're still publishing these answers to the most common questions about the program for reference purposes only.

JRG Frequently Asked Questions (FAQs)

General Questions

General Questions

  1. What is the Goal of the Job Retention Program (JRG)?

The legislative goal of the Job Retention Program is to aid businesses and certain nonprofits that have kept over 90 percent of their employees on the payroll despite experiencing significant declines in revenue AND that have not received assistance from other programs.

  1. How is the Job Retention Program Supported?

The Job Retention Program is funded through the North Carolina share of the federal Coronavirus Relief Fund, enacted as part of the CARES Act legislation approved by the U.S. Congress.  The North Carolina General Assembly approved state legislation (see section 4.2B) authorizing the use of $15 million for this new program.  (Note: On September 4, 2020, an additional $45.5 million was appropriated for the program, bringing the total of available funds to $60.5 million.)

  1. Will the Job Retention Program be Ongoing/Recurring?

No.  The Job Retention Program is a one-time measure created to help get money to businesses and nonprofits that have not received help from other programs.

Questions About Organizations Eligible to Apply

Questions About Organizations Eligible to Apply

  1. Who/What Can Apply for a Grant?

The Job Retention Program was created to help employers, including both private businesses and certain types of nonprofits. 

  1. I Work for Myself and Do Some Independent Contracting.  Am I Eligible?

Not for this program.  Only employers with employees may apply.  

  1. Are Sole Proprietorships Eligible For this Program?

Sole proprietorships with employees subject to W-2 withholding are eligible.

  1. Are All Nonprofit Organizations Eligible For this Program?

While many nonprofit organizations are eligible, not all types of nonprofits are eligible.  The General Assembly has also indicated that it may amend the program to include more nonprofits [Note: later, the General Assembly did amend the program].    The law creating the program was specific on which nonprofits are eligible, and here are the legal descriptions:

  • (NC General Statute 105-130.11(a)(3)) Cemetery corporations and corporations organized for religious, charitable, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private stockholder or individual. (NOTE:  This state law roughly covers nonprofits which are covered under 501c3 and 501c11 of the federal Internal Revenue Code)
  • (NC General Statute 105-130.11(a)(6)) Clubs organized and operated exclusively for pleasure, recreation, and other nonprofitable purposes, no part of the net earnings of which inures to the benefit of any private stockholder or member. (NOTE:  This state law roughly covers nonprofits which are covered under 501c7 of the federal Internal Revenue Code)

As described above, the General Assembly did amend the statute to include these nonprofits as well:

  • (NC General Statute 105-130.11(a)(4) Business leagues, chambers of commerce, merchants' associations, or boards of trade not organized for profit, and no part of the net earnings of which inures to the benefit of any private stockholder or individual. (NOTE:  This state law roughly covers nonprofits which are covered under 501c6 of the federal Internal Revenue Code)
  1. May Chambers of Commerce Apply For This Program?

Yes, provisionally.   While chambers of commerce were not included in the original list of eligible nonprofits, the first General Assembly bill summary indicated that such 501c6 organizations were intended to be included and later, the General Assembly confirmed the ability for 501c6 organizations to participate.

Questions About the Criteria for Receiving a Grant

Questions About the Criteria for Receiving a Grant

  1. My Type of Business/Nonprofit is Eligible.  What Other Qualifications Are There?

The statutory qualifications for eligibility under the Job Retention Program are:

  • No Other Assistance.  Your business/nonprofit did not participate in the Paycheck Protection Program, Main Street Lending Program, or the state Rapid Recovery Loan Program.
  • Keep Employees.  Your business/nonprofit maintained at least 90 percent of the full-time North Carolina employees that it had on March 1, 2020 as of July 1,  2020.
  • Face Hardship from the Economic Downturn.  Your business/nonprofit experienced a loss of over 10 percent of sales/receipts when comparing the period of March-May 2019 to March-May 2020.

Other qualifications under broadly applicable state laws are:

  • Your business/nonprofit has no overdue tax debts to federal, state or local governments before you receive a payment from this program.
  • Your business/nonprofit has a conflict of interest policy compliant with 143C-6-23

Other federal and state reporting requirements will apply and grantees will have to sign a grant agreement.

  1. My Business Has Received Funds from the Paycheck Protection Program, but I Could Use More Support for My Business.  May I Apply?

No.  The Job Retention Program has limited funds and only those employers that have not participated in the major COVID-related business programs may apply.

  1. My Business Has Received a Rapid Recovery Loan, but Expects to Repay It.   May I Apply?

No.  The Job Retention Program has limited funds and only those employers that have not participated in the major COVID-related business programs may apply.

  1. How Do You Define Full-Time or Full-Time Equivalent Employees?

Full-time employees, under the definition used by the Job Retention statute, are:

A person who is employed for consideration for at least 35 hours a week, whose wages are subject to withholding under Article 4A of Chapter 105 of the General Statutes, who is not a worker with an H-1B visa or with H-1B status….. The term does not include any person who works as an independent contractor or on a consulting basis for the business.

  1. The Job Retention Grant Program requires me, as an applicant, to certify that we do not have any overdue tax debts? Does that have a specific definition of what it is to be “overdue?”

There is a specific definition. The state law defines it this way:

  • Overdue tax debt. - Any part of a tax debt that remains unpaid 90 days or more after it becomes collectible under G.S. 105-241.22. The term does not include a tax debt for which the taxpayer entered into an installment agreement for the tax debt under G.S. 105-237 within 90 days after the tax debt became collectible, if the taxpayer has not failed to make any payments due under the installment agreement.

OK, so when does a tax become collectible? For the state…. The Department of Revenue may collect a tax in the following circumstances:

  • When a taxpayer files a return showing an amount due with the return and does not pay the amount shown due. This subdivision does not apply to a consolidated or combined return filed at the request of the Secretary of Revenue under Part 1 of Article 4 of this Chapter.
  • When the Department sends a notice of collection after a taxpayer does not file a timely request for a Departmental review of a proposed assessment of tax or based upon taxpayer inaction in accordance with G.S. 105-241.13A.
  • When a taxpayer and the Department agree on a settlement concerning the amount of tax due.
  • When the Department sends a notice of final determination concerning an assessment of tax and the taxpayer does not file a timely petition for a contested case hearing on the assessment.
  • When a final decision is issued on a proposed assessment of tax after a contested case hearing.
  • When a petition for a contested case at the Office of Administrative Hearings is dismissed and the period for timely filing a petition has expired.

So it’s a very precise meaning, and you know if you owe it. Also, if you have not yet paid taxes because governments have delayed collection dates, that is not “an overdue tax” issue.

  1. My Business Engages Independent Contractors.  Are They Included In the Definition of Full-Time Employees?

No.

  1. The Eligibility Criteria Includes a Measurement of Change in Sales/Receipts from March 2019-May 2019.  My Business was started in December 2019.   May I Apply?

No.   The applicant has to have been in existence for the period between March to May 2019 and continue to be in existence to apply

  1. My Business and Personal Life Are Very Hectic Until September.  May I Apply for an Extension?

No. You must have the application completed and submitted to the Department by September 1, and that date was explicitly established by the law creating this program.

Questions About How Much Money to Expect

Questions About How Much Money to Expect

  1. How Much May My Business Receive from the Job Retention Program?

An applicant that meets all other criteria is eligible to receive up to the lesser of the following:

  • The equivalent of two months of its average monthly North Carolina payroll from 2019 (after adjusting for high wage earners – those making over $100,000 in 2019 in wages/salaries) plus an additional 25 percent of that amount, or
  • $250,000

THE DEPARTMENT WILL CALCULATE THE MAXIMUM GRANT POSSIBLE ON YOUR BEHALF, BASED ON THE INFORMATION THE APPLICANT PROVIDES.

  1. Does My Change in Sales or My Number of Employees Affect the Maximum Grant Possible?

No.   Your change in sales and full-time employees only matters for basic eligibility for the Program.   Those factors do not affect the amount of the request.  Only the eligible North Carolina payroll costs for 2019 determine the grant amount that can be requested.

  1. What are Eligible Payroll Costs?

Eligible Payroll Costs are similar to those used by the federal Paycheck Protection Program for North Carolina employees, including:

  • Wages, salaries and other cash payments for employees, with the limitation that the amount paid to employees in excess of $100,000 per year must be excluded.
  • Employer-paid health insurance premiums
  • Employer-paid retirement contributions
  • State employment taxes, such as unemployment insurance taxes

If your business uses a third-party payroll provider, that provider may be able to give you documentation of those costs because many providers have done so for the purposes of their clients using the PPP.  You will also be required to submit your 2019 W-3 form.

Questions About Receiving and Using the Grant

Questions About Receiving and Using the Grant

  1.  Is This Grant Program Competitive?

No.   Any applicant that meets the criteria will receive some level of financial assistance.

  1. If My Business/Nonprofit Applies and is Eligible, When Can We Expect to Receive the Grant Money?

Applications are available on the NC Commerce website  and applications are due on September 1, 2020 with no exceptions.    We expect to make award notices and provide grant agreements soon after the due date and distribute grant funds by early October 2020.

  1. Will I Receive the Full Amount of the Request?

The amount of your grant depends on two things:  the Maximum Grant Possible calculation based on the payroll information that you provided with verification and how much in grant funds is requested overall.  

The General Assembly appropriated $15 million for this program, but the program is limited to that amount.   For example, if there are $30 million in requests, or 2 times as much in requests as we have money for, each applicant will receive 50 percent of what was requested to stay within the $15 million (note: a total of $60.5 is available as of September 4, 2020).

  1. Does Applying Early Help My Chances?

All grant applications completed and submitted by September 1 will be treated the same.  However, early submission is encouraged to avoid any technical or other glitches that may occur.

  1. Does Applying Late, but Before the Deadline, Help My Chances?

Never.

  1. When Will I Know the Amount of the Grant?

Our goal is to perform the reviews and calculations by the end of September or early October.

  1. Will There Be More Paperwork To Get the Grant?

Yes.  State law requires the applicant to officially certify that it has no overdue federal, state or local tax debt and that the applicant has a conflict of interest policy that meets state requirements.    Copies of those documents will be required.   You will also have to sign a grant agreement that, among other things, you will spend these funds for legitimate operational purposes of your business before December 30, 2020.  We will request documentation of your actual expenses for payroll and other related items during the COVID period (March 1, 2020 – July 31, 2020 generally) in order to verify that you use the grant funds for those expenses.  That information is not required with the Application. 

We will provide you a Substitute W-9 form to complete if you are eligible for a grant.

Other federal and state requirements will apply and the Department is working to make those compliance requirements as streamlined as possible for you.

  1. How Will I Actually Receive the Funding?

At the appropriate time, we may ask for your electronic funds transfer information to distribute funds in that manner.    Otherwise, a check will be mailed to the applicant’s address.  The Department will distribute the entire amount of the check.

  1. Are There Limitations on How The Funds Can Be Used?

The only limitation is that the funds be used for legitimate operational purposes of the business by  December 30, 2020.   Payroll is a suggestion of such a legitimate operational purpose that can be easily verified.

  1. Will The Grants Be Announced?

The Department of Commerce will issue a release when the checks/wires are sent indicating the overall number of grants and total amount of the grants.    However, we believe that members of the media will ask for details on the program, including but not limited to the name of the grantee (your business name) and the amount your business received.   So you should be prepared for that.

  1. Is Information on the Grant Awards Subject to the Public Records Request?

Yes.

  1. Is the Grant Award Counted as Taxable Income?

Yes.