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 (IRS) to adopt measures to expedite processing of ERTC claims, provide restaurants additional time to file federal income tax documentation and not assess financial penalties. In response, the IRS announced that businesses which took advantage of the ERTC in the fourth calendar quarter of 2021 can repay or deposit those taxes without being assessed a penalty.
While this vital tax tool has ended for now, Rep. Carol Miller (R-WV) introduced the ERTC Reinstatement Act in Dec. 2021, bipartisan legislation that allows struggling small businesses to access up to $7,000 in tax credits for each eligible employee’s wages between Oct.-Dec. 2021. Sens. Maggie Hassan (D-NH) and Tim Scott (R-SC) introduced companion legislation on Feb. 11, 2022.
The Association looks forward to working with members of Congress to pass the legislation and provide relief to restaurants across the country.
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 (IRS) to adopt measures to expedite processing of ERTC claims, provide restaurants additional time to file federal income tax documentation and not assess financial penalties. In response, the IRS announced that businesses which took advantage of the ERTC in the fourth calendar quarter of 2021 can repay or deposit those taxes without being assessed a penalty.
While this vital tax tool has ended for now, Rep. Carol Miller (R-WV) introduced the ERTC Reinstatement Act in Dec. 2021, bipartisan legislation that allows struggling small businesses to access up to $7,000 in tax credits for each eligible employee’s wages between Oct.-Dec. 2021. Sens. Maggie Hassan (D-NH) and Tim Scott (R-SC) introduced companion legislation on Feb. 11, 2022.
The Association looks forward to working with members of Congress to pass the legislation and provide relief to restaurants across the country.
ERTC Reinstatement Policy Brief
April 12, 2022
Letter to Treasury/IRS on ERTC Delays Causing Tax Liabilities
February 23, 2022