Five Things to do After You Receive Your Restaurant Revitalization Fund Grant

If you were one of the fortunate few to receive a Restaurant Revitalization Fund (RRF) grant, here are the top five post-award things to do:

1. Plan Your Spending

The funds can be used on the following eligible expenses incurred between February 15, 2020 and March 11, 2023:

  1. Business payroll costs, including sick leave and costs related to the continuation of group health care, life, disability, vision, or dental benefits during periods of paid sick, medical, or family leave, and group health care, life, disability, vision, or dental insurance premiums. Reminder – do not include compensation for employees earning over $100,000.

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Double Dipping Opportunities for RRF and SVOG Recipients Claiming the Employee Retention Credit

When additional Employee Retention Credit (ERC) guidance was provided in March 2021, the Notices clarified wages utilized for Paycheck Protection Program (PPP) loan forgiveness are not eligible for the ERC.

We assumed this double dipping prohibition would extend to post-CARES Act COVID relief programs, such as the Shuttered Venue Operator Grants (SVOG) and the Restaurant Revitalization Fund (RRF). However, Notice 2021-49 provides guidance that indicates otherwise.

RRF and SVOG Wage Double Dipping Permitted for 2020 and 2021 Q1 and Q2

For RRF and SVOG recipients, coordination between these and the other COVID programs (PPP,

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Gross Receipts for Employee Retention Credit Does NOT Include Certain COVID Relief Funds

Revenue Procedure 2021-33, issued by the IRS on August 9, 2021, now answers one of our biggest Employee Retention Credit (ERC) questions: Are Paycheck Protection Program (PPP) loans included in gross receipts for ERC eligibility? Based on this guidance, the answer is NO.

ERC Eligibility Refresher

As a reminder, an employer is eligible for the ERC through one of three ways during 2021:

  1. A full or partial suspension of operations due to a government order;
  2. A gross receipts decline of over 20% when compared to the same quarter in 2019; or
  3. Qualification as a Recovery Startup Business (2021 Q3 and Q4 only).

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Your Top Employee Retention Credit Questions Answered in Recent IRS Guidance

In early August, the IRS issued two pieces of guidance on the Employee Retention Credit (ERC) – Notice 2021-49 and Revenue Procedure 2021-33. This guidance includes answers to your top questions, including:

  • Whether PPP loan proceeds are included in the gross receipts calculation;
  • Whether S-corporation owners are eligible for the ERC;
  • When the ERC credit is included on your income tax return; and
  • What method of accounting to use when calculating a decline in gross receipts.

Also included is a new provision that allows for double dipping on wages for recipients of Shuttered Venue Operator Grants and Restaurant Revitalization Fund Grants.

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Planning to Apply for Restaurant Revitalization Fund Grants? – Prepare Your Documentation Now

On March 11, 2021, President Biden signed into law the American Rescue Plan Act (the Act), to speed up the U.S. recovery from the economic and health impacts of the COVID-19 pandemic. Included in the Act is a Restaurant Revitalization Fund (RRF) with appropriations of $28.6 billion in grants to support the restaurant industry.

Application

The RRF begins accepting applications from eligible entities on Monday, May 3, 2021 at 9:00 AM (PST). Applications will be accepted through a U.S. Small Business Administration (SBA) dedicated portal and certain Point of Sale (POS) vendor partners. We encourage eligible applicants to prepare gross receipts documentation in advance to be ready when the application goes live.

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