Good news for restaurants eagerly awaiting the opportunity to claim employee retention tax credits (ERTC) for 2020 – 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: https://www.irs.gov/pub/irs-drop/n-21-20.pdf. Last week, the Association released the attached fact sheet on the ERTC to help members discuss this opportunity with their tax and accounting team.
The guidance in Notice 2021-20 makes major changes for those restaurants who accessed PPP in 2020, and permits many restaurants 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 answers to questions such as: