March 4, 2021

 

Employee Retention Tax Credit

The IRS recently released its guidance for eligible businesses accessing up to $5,000 per employee in 2020 as long as it does not directly intersect with PPP payroll funds. In response, the National Restaurant Association released a fact sheet on the ERTC to help members discuss this opportunity with their tax and accounting team. The information is useful regardless of your sector.

 

The guidance in Notice 2021-20 makes major changes for those restaurants who accessed PPP in 2020, and permits businesses to access a credit is equal to 50 percent of qualified wages paid, including qualified health plan expenses, for up to $10,000 per employee in 2020. The maximum credit available for each employee is $5,000 in 2020.

 

Notice 2021-20 also provides information on:

  • Employer eligibility;

  • Definition of full or partial suspension of trade or business operations;

  • Definition of significant decline in gross receipts;

  • Maximum amount of an eligible employer’s employee retention credit;

  • Qualified wages;

  • Claiming the employee retention credit, and;

  • Substantiating the claim for the credit.

Policy brief on Restaurant Revitalization Fund.

January 13, 2021

 

If you are considering first or second round PPP draws, here are the forms and information you'll need.

 

First Draw Forms

Draw Forms

 

Guidance and Resources

 

For more information and updates, visit SBA.gov/PPP or Treasury.gov/CARES  

January 8, 2021

 

PPP Guidance Released

The Small Business Administration (SBA), in consultation with the Treasury Department, has recently released additional PPP guidance. For more information and updates, visit SBA.gov/PPP or Treasury.gov/CARES.

Key guidance includes:

December 15, 2020

 

Minnesota Legislature Passes Bipartisan $215 Million Relief Package. The governor and legislators finalized a bipartisan economic relief program based on the work of Hospitality Minnesota, with input from our members and Board. The bill passed the Senate 62-4 and the House 117-13.

 

We thank the governor and the authors, Sen. Eric Pratt and Rep. Tim Mahoney, as well as Rep. Dave Baker who played a monumental roll in the negotiations.

 

While the bill is not perfect, it strikes the important balance of providing swift direct financial aid to a large number of distressed hospitality businesses, followed by a county-based program with the flexibility to fill in certain funding gaps, such as assistance to support lodging properties. This state aid will hopefully act as a bridge until Congress passes needed federal relief.

 

Phase One | Immediate Relief  

The Department of Revenue (“DOR”) indicates that over 4,300 businesses will receive direct payments, hopefully within the next two weeks; 4,000 of which are hospitality businesses. 

 

You do not need to take any action to receive payment. 

 

Under the bill you are eligible for the initial payment if you are a restaurant, bar, catering company, brewery, distillery, winery, bowling center, or fitness center and you experienced a 30% or more reduction in sales Q2/Q3 2020 when compared to the same period the previous year. Since operators were closed for indoor, in-person hospitality from April-June 10, the number of hospitality businesses is significant.

 

Payments will be scaled based on pre-pandemic number of full- and part-time employees, per EIN*: 

 

  • Small businesses, not in the UI system will receive $10,000

  • Businesses with 0-20 employees, receive $15,000

  • Businesses with 21-100 employees, receive $25,000

  • Businesses with 101-300 employees receive $35,000

  • Businesses with 300+ employees, receive $45,000

 

*DOR indicates that approximately 300 of the 4,300 businesses have multiple locations listed under one EIN for employee count purposes. Unfortunately, for the Phase One DOR payments these multiple locations will be treated as one business and may receive disproportionately less in their initial payment. The Administration has told us and the legislature that it does not have the ability to solve the employee-matching problem without delaying the program by 5-6 months.

 

Phase Two | County-Administered “Gap” Payments

The state is providing $114.8 million to the counties (on a per capita basis), who are then given flexibility to “fill in the gaps” from Phase One, including support to lodging properties. Hospitality Minnesota testified and made the case to the legislature and we have already reached out to the counties to advocate for certain hospitality businesses receiving heightened consideration, including:

 

  • Lodging properties

  • Certain restaurant operators with multiple locations (see above)

  • Operators who may not make the 30% threshold cut, but still need help

  • Operators for whom Q2/Q3 comparison is not favorable, but still need help

 

Additional Notes and Clarifications

  • Receiving direct payment via Phase One does not exclude a business from Phase Two county aid.

  • While the bill requires recipients to have a physical presence in the county, it does not require their ownership to be located there.

  • Participating in DOR’s sales tax abatement program does not exclude you from relief.

  • While relief funds are taxable, DOR indicates that if they are used to keep your business from going under, they should be fully deductible. We recommend consulting your tax expert.

  • The package also extends unemployment benefits by 13 weeks for about 120,000 Minnesotans who will run out of benefits later this month.