New Hampshire Offers a Reduction of Excess Main Street Relief Funds Payable

By Stanley Rose June 28, 2021

(The Unexpected “Business Recoupment Relief Program”)

Many New Hampshire-based businesses that received funds provided by the state’s Main Street Relief program are receiving notices from the state indicating that (1) as expected, part of the money will need to be returned to the state, but (2) there may be an opportunity to reduce the amount that is due, allowing the business to permanently retain a portion of the amount otherwise to be returned.

The purpose of this article is to explain these whiplash-inducing notices, and help its readers understand this unexpected and welcome new feature, known as the Business Recoupment Relief Program, that can allow them to retain more of what they received.

Background

A little over a year ago, New Hampshire’s governor announced the creation of the Main Street Relief Fund, rolling out a pool of $400 million to help support businesses impacted by the pandemic. We discussed this program in a May 2020 BNN article. Applicants were asked to provide historical 2019 financial information and estimated 2020 gross receipts, and were made aware at that time that a “true up” would be performed at a later date that could result in potential obligations for businesses to return excess funding. Reports collected by the state earlier this year allowed comparison of estimated 2020 revenues with actual results, providing the basis of the state’s recoupment requests.

That time of reckoning is now upon us, and business owners have begun receiving notices informing them of the amounts the state plans to recoup – but with a favorable twist that few if any saw coming.

Recoupment letters

With 2020 data in hand, the state is sending correspondence (generally e-mails) to Main Street Relief recipients, informing them of the amount of funding that the state plans to recoup from them. These letters are essentially invoices. But these notices also unexpectedly introduce the new Business Recoupment Relief Program, which may allow businesses to reduce (or even eliminate) the amount the state otherwise will recoup. In some cases, the businesses must apply for their recoupment reduction.

Observation: Note that there is no new funding created by this new feature. No additional money will be sent to businesses. The new feature instead provides a potential path for businesses to retain more of the original funding than otherwise would be the case.

The relief (reducing the recoupment)

The reduction is achieved by identifying Covid-19 related business expenses incurred by the business, which may be used to reduce the recoupment on a dollar-for dollar basis. The new program creates the following categories of relief recipients, each of which has its own unique path to potentially reducing the recoupment:

1. Businesses owing recoupment less than $10,000 are in a favorable “de minimis” category. Their estimates of 2020 revenue were close enough to the actual results that their recoupment letters will inform them that (1) they will not have to repay any portion of the recoupment, and (2) they do NOT have to fill out an application or take any other steps to receive this forgiveness.
2. Businesses owing recoupment of at least $10,000, and are claiming Covid-19 business expenses of $20,000 or less must apply for their reductions, but may do so using simplified applications in which they will self-certify that they incurred sufficient Covid-19 related business expenses, and that they wish to use those expenses on a dollar-for-dollar basis to reduce the recoupment owed.
3. Businesses owing recoupment of at least $10,000, and are claiming Covid-19 business expenses of more than $20,000 also must apply for their reductions, but using a different application and providing supporting material documenting their Covid-19 business expenses.

Observation: Businesses may file only one application; they should not file one for expenditures up to $20,000 plus another for the excess.

In every case, businesses are expected to apply for their relief (if necessary) only after they receive notice from the state quantifying their recoupment amounts. Those who require applications may apply anytime between now and 4:00 PM on July 22 of this year.

Conclusion

The correspondence businesses will receive from the state (generally via e-mail) will inform recipients of whether an application is due to obtain reduced recoupment, and will provide links to the applications and more detailed information. A number of those links are reproduced below. Eligible businesses should act timely (no later than July 22) to take advantage of this unexpected opportunity provided by the Business Recoupment Relief Program. Sometimes it really is “Christmas in July.”

Links:

A list of common Covid-19 related business expenses

Self-certification description and application link

Documentation description and application link

For more information, please contact your BNN tax service provider at 800.244.7444.