The COVID-19 Relief Bill

Congress has agreed on a $900 billion pandemic relief bill that includes several items that will benefit restaurants:

Paycheck Protection Program

The bill allows restaurants to access a second draw from PPP at 3.5x monthly payroll (vs 2.5x for other sectors); it also enacts a per-location 300 employee cap vs. a 300 all-location cap for other industries. Program ends 3/31/2021.

Tax Deductibility

Businesses can deduct allowable business expenses paid with PPP loans, including payroll, rent, mortgage interest, utilities and other allowable expenses. This applies to either a first draw or a second draw PPP loan.

Employee Retention Tax Credits (ERTC)

ERTC will be available for the first two quarters of 2021 and will allow certain employers* to take up to $7,000 per eligible employee retained during these two quarters. Employers who received a PPP loan may still qualify for ERTC on wages that are not paid for with forgiven PPP funds.
* Employers with up to 500 employees and at least a 20% revenue loss in gross receipts when compared with the same quarter in the prior year.

Work Opportunity Tax Credit (WOTC)

WOTC is extended by five years, granting support for restaurants that hire, train, and retain employees from target groups.

Expanded the Business Meal Deduction

Business meals provided by a restaurant are now 100% deductible for 2021 and 2022.

Temporary Enhancements to SBA (non-PPP) Lending Programs

• Increases 7(a) loan guarantee to 90% with no fees
• No fees for 504 loans
• Extends CARES Act principal and interest waiver for new and existing 7(a), 504, and micro-loans
• For loans taken prior to the CARES Act, allows three additional months of principal and interest paid by the government; restaurants authorized to take an additional five months beyond the three.