The Restaurant Revitalization Tax Credit Act has been reintroduced to provide payroll tax relief to eligible small businesses.
Senate Bill Would Give Payroll Tax Relief to Some Small Businesses
The new legislation creates a special tax credit that is available to businesses that had previously applied for the Small Business Administration’s Restaurant Revitalization Fund (RRF) program, but did not receive a grant because the program ran out of funding. It has been estimated that nearly 2 out of every 3 eligible RRF applicants were left unassisted, which works out at around 175,000 businesses.
Businesses Eligible for New Tax Credit
The credit available through the Restaurant Revitalization Tax Credit is open only to those businesses that applied for and were eligible to receive RRF grants. Eligible employers must have offset payroll taxes of up to $25,000 per quarter in calendar year 2023.
In addition, for businesses with 10 or fewer employees, the credit is refundable up to a total of $25,000 over the course of the year, with the cap on refundability to be gradually phased-out for businesses with under 20 employees.
Restaurant Businesses ‘Hurting for Too Long’
Senator Ben Cardin led the reintroduction of the bill and said: “We have not forgotten about these restaurants. They have been hurting for too long. The Restaurant Revitalization Fund was a timely program that simply did not have enough funds to cover the intense demand.
“I’ve heard from many restaurant owners who, having missed out on these funds, used their personal retirement savings or put their homes up as collateral to keep their businesses afloat. This tax credit will help ease their burden. It will support the restaurants we love while helping to boost our local economies.”
Additional Eligibility Criteria
Eligible businesses must have experienced average operating losses of at least 30% both in 2020 and 2021 compared to 2019, or losses of at least 50% in either calendar years 2020 or 2021 compared to 2019.
To be eligible, businesses must also have been in operation before March 14 in 2020, and have paid payroll tax in at least two quarters in 2021.
This article, "Senate Bill Would Give Payroll Tax Relief to Some Small Businesses" was first published on Small Business Trends
Publisher: Gabrielle Pickard-Whitehead