The Employee Retention Tax Credit is a COVID-19 relief measure enhanced in the Taxpayer Certainty & Disaster Tax Relief Act of 2020, expanded by the American Rescue Plan Act 2021, and implemented to help restaurants and small businesses.
Unfortunately, the program initially slated to operate until Dec. 31, 2021, came to an early end when the House of Representatives passed the bipartisan Infrastructure Investment and Jobs Act by a 228 – 206 vote on Friday, November 5, 2021. The legislation, which passed the Senate in August by a vote of 69-30, ends ERTC for the fourth calendar quarter of 2021 in order to raise $8 billion and partially offset federal infrastructure spending increases. Previous ERTC eligibility or payments, either for 2020 or any of the prior three calendar quarters for 2021, should not be affected.
In an effort to prevent program cuts, the Association reached out to Congress, sharing the negative impact this would have on restaurants across the country still struggling with increased food costs, supply chain disruptions, limited capacity, changes in consumer behavior, and a labor shortage.
In anticipation that ERTC would end early, the Association alerted restaurants through a consumer education video and several advisories to take precautions in advance.
As the program cuts became a reality, the Association has engaged the Department of Treasury and Internal Revenue Service to adopt measures to expedite processing of ERTC claims, provide restaurants additional time to file federal income tax documentation and not assess financial penalties.