January 27, 2022

ERTC Reinstatement Act restores valuable tool for restaurants

Program intended to expire at end of 2021 ended early to help fund the Infrastructure Investment and Jobs Act.
Introduced by Rep. Carol Miller (R-WV) in December 2021, the bipartisan Employee Retention Tax Credit (ERTC) Reinstatement Act restores the ERTC for the 4th quarter (Oct. 1-Dec.31) of 2021. 

“By reinstating the ERTC, struggling small businesses can access one of the last remaining pandemic recovery programs to receive the help they need to replenish their workforce and get back on track,” said Miller.

A valuable and popular COVID-19 relief tool for thousands of restaurants, ERTC was established in the Coronavirus Aid, Relief, and Economic Security (CARES) Act in March 2020 to help small businesses retain and rehire employees who were let go due to the pandemic. The program ended in September 2021 to help fund the Infrastructure Investment and Jobs Act. 

“The ERTC was a life saver, as it flowed right through our restaurants and to our employees’ wages,” said Eric Roberts, owner of Lui Lui Restaurant in Nashua and West Lebanon, New Hampshire. “We kept on our team over 100 employees through the worst of the pandemic, and we are glad we did. However, too many restaurants are still struggling this winter and need this targeted support.”

Congress needs to act quickly; results from a recent Association survey show that 60% of respondents experienced a significant loss in sales in Q4 2021 that would qualify them for ERTC. 

Additionally, 43% of restaurants that filed for ERTC did not receive a payment. Ending the ERTC early created more financial hardship for restaurants still struggling to survive the pandemic, labor shortages, inflation, decreased consumer confidence, and supply chain delays. 

“We must provide certainty and predictability to American small business owners,” said Rep. Kevin Hern (R-OK) who joined fellow Reps. Stephanie Murphy (D-FL) and Terri Sewell (D-AL) in cosponsoring the bill’s introduction. To date, nearly 50 representatives in the House support the bill, and the Association is working with senators to introduce a companion version soon.  

In addition to seeking help for restaurants through legislation, the Association sought assistance from the Department of Treasury and Internal Revenue Service (IRS) to speed up ERTC payments and allow small businesses to defer income tax payments without penalty.