Afflicted Business Relief Grant Applications Open March 1st

The State of Michigan will distribute up to $409 million of its American Rescue Plan Act fundsas grants to eligible businesses who have suffered financial hardship due to COVID-19. The Michigan Department of Treasury is administering this grant.

Eligible businesses include:

• Entertainment venues
• Recreational facilities/public places of amusement
• Gyms/Exercise facilities
• Food service establishments
• Cosmetology or barber services
• Nursery dealers/growers
• Athletic trainers
• Body art facilities
• Hotels or bed and breakfasts

View Details on Eligibility

In order for these business categories to qualify, business owners must demonstrate the following:

1. Physical presence in the State of Michigan before October 2019*
2. IS NOT tax-exempt or a government entity
3. Is currently open for business
4. Has had a decline in Michigan sales of 5% or greater when comparing 2019 to 2020 financials

Application Details

Applications open on March 1, 2022, and must be completed by March 31, 2022, and will require documentation showing financial hardship with regard to the following fixed costs:

Property Tax, Lease Costs, MI Unemployment Tax, On-Premise Liquor License fees, Food Inspection Fees, and other business license and inspection fees.

Eligible businesses applying for a grant will be required to include tax and other financial information and documentation to support their claims.

The Fine Print

Applications will not be approved on a first-come basis, but will be evaluated, and possibly pro-rated based on the aggregate of approved applications.

Businesses include self-employed, independent contractors, and sole proprietorship with no employees, or had paid employees affected by at least 5% of the year.

Under the Afflicted Business Relief Grant Program, eligible businesses in operation before October 1, 2019, may receive a percentage of their loss in total state sales through a grant.

*Eligible businesses that began operating between October 1, 2019, and June 1, 2020, must certify that it was closed or partially closed due to an Executive Order or epidemic order issued by the Michigan Department of Health and Human Services and may receive a grant equal to 25% of certain specified costs.

See the Michigan.gov Fact Sheet here for more information.

Employee Retention Credit Update

As a reminder to those businesses above that may regularly apply for a tip credit, please see our update on the IRS decision regarding the coordination of the Employee Retention Credit with the Tip Credit.

There are some major wins for employers with tipped employees buried in this change.

The first, and most obvious win is that the same wages can be used to qualify for both the tip credit and ERC. This is an allowable “double-dip."

The second win is that “tipped wages,” count as eligible wages for the ERC, increasing the amount of credit opportunity significantly.

Lastly, the FTE rather than FTEE is being used which helps in the determination or who is considered a large employer and benefits industries that employ what is normally considered a part-time (less than 40 hours per week) workforce.