GRA Weekly

January 6, 2022

This week's newsletter is brought to you by Coca-Cola .

ERTC REMINDERS

ERTC Tax Advisory

For businesses who applied for COVID-related employee retention tax credits (ERTC) in 2021, there may be a severe cash flow challenge occurring for those waiting an average 6 to 10 months to receive the ERTC payment. Under ERTC rules, an eligible restaurant cannot take normal federal tax deductions for 1) payroll expenses and 2) healthcare group benefit expenses during the applicable calendar quarter if those payments were considered eligible wages for ERTC. While this increases the restaurant’s tax liability, the restaurant would have those costs more than offset by an ERTC payment.

However, the restaurant may face a liquidity crisis if the federal tax bill is due before receiving an ERTC payment. Members are advised to plan for this scenario if they fall into this criteria. On Nov. 15, 2021, the National Restaurant Association urged the IRS and Department of Treasury to speed ERTC payments and delay related taxes. A national grassroots petition on these ERTC recommendations has over 5,300 signatories, and we encourage members to add their name.

The Association also strongly supports the bipartisan “Employee Retention Tax Credit Reinstatement Act” (H.R. 6161). The bill, introduced by Reps. Carol Miller (R-WV) and Stephanie Murphy (D-FL), would restore the fourth quarter of ERTC.

Frequently Asked Questions Regarding ERTC, provided by GRA Corporate Partner, NetTax

Q: Can tips be included as eligible wages paid for the ERTC Credit?

A: Yes, in Guidance N-2021-49 the IRS outlines that tips can be included as eligible wages for the credit.

Q:Is it too late to file for COVID Employee Retention payroll tax refund (CV-ERC)?

A: No, the CV-ERC eligibility period ended September 30, 2021. However, you can still file for refunds for at least 2 more years.

VACCINE MANDATE UPDATES

Vaccine Mandate Litigation Update

On Friday, January 7, 2022, the U.S. Supreme Court will hear two oral arguments on four cases challenging two regulations. One of the oral arguments will deal exclusively with the challenges to the vaccine mandate on large private employers—including restaurants—and the other on vaccine mandates on some health care facilities.

The cases impacting restaurants challenges the “emergency temporary standard” (ETS) issued by the Occupational Safety and Health Administration of the U.S. Department of Labor. The ETS would require employers with 100 employees or more to either mandate COVID-19 vaccination or have employees tested weekly. The new effective date of the regulation is Monday, January 10th. There is currently no stay in place as the Sixth Circuit lifted the stay issued earlier by another federal court. The U.S. Court of Appeals for the Sixth Circuit has been tasked with overseeing all challenges to the ETS.

While the Supreme Court could certainly rule on the constitutionality of the ETS after oral argument this Friday, and before the Monday effective date, my guess is that it will, instead, reinstate the stay and allow for the process to continue in the lower courts and leave itself open to rule on the constitutional issues at a later date.

Lately, as evidenced by several abortion law cases, the Supreme Court has shown an unwillingness to make broad rulings on constitutional issues while cases have not been fully litigated and decided by the federal courts below. The Supreme Court also does not like to issue broad rulings in a hurry. While I could be wrong, I would expect a decision on the stay to come by no later than next week—even, potentially, Friday afternoon—with more on the constitutionality at a later time.

Restaurants Prepare for Vaccine Mandates

Many operators are complying with President Biden’s vaccine mandate as well as those from numerous state and local regulators that require customers and staff to be vaccinated to serve or dine in restaurants. The Association’s food safety and policy experts created a checklist of considerations that will help navigate compliance.

INTUIT QUICKBOOKS RESTAURANT RELIEF | APPLY TODAY!

Restaurants Can Now Apply for the QuickBooks Restaurant Relief Grant

Georgia restaurants can apply for the QuickBooks Restaurant Relief Grant Click Here to apply!.

Launching December 8 thru January 7, restaurants with an annual net revenue of less than $250,000 can apply for a $5,000 grant to cover payroll and operating expenses to help employ and retain staff. The goal of the program is to help the small restaurants most impacted by COVID-19 hire employees and grow.

FOR MORE INFORMATION

For more information about the program, qualifications/requirements and evaluation process, please click HERE for more information.

80/20 TIP CREDIT RULE

Federal 80/20 Rule Reminder

Last year the U.S. Department of Labor released new tip credit regulations (also known as “dual jobs” or “80/20”) that govern pay for tipped restaurant employees. This new regulation became effective on December 28. The U.S. Labor Department exceeded its authority in releasing these rules, and the impact will be a definite net-negative for the restaurant industry. In November, the National Restaurant Association’s Restaurant Law Center and the Texas Restaurant Association filed an emergency lawsuit in a Texas federal court challenging the rules and asking for an immediate injunction while the case is being considered. Unfortunately, we expect the court will allow the new regulations to remain in effect at least until sometime in February. Get the Details.

OPERATOR SURVEY

The National Restaurant Association has launched their latest operator survey to gather data to help our industry's advocacy efforts across the country. We need your help in answering questions on how the following is currently (or will) impact you!

Omicron impact
RRF
ERTC
Tip credit

Take the survey today!

2022 PUBLIC AFFAIRS CONFERENCE

The National Restaurant Association’s 2022 Public Affairs Conference is April 25-27 at the Grand Hyatt in Washington, DC. Join the Georgia Restaurant Association and fellow restaurateurs from across the nation in our nation's capitol as we advocate for the restaurant industry.

Barring a dramatic change from the DC government, this will be a fully in-person event with no virtual option. Attendees will be required to show proof of COVID-19 vaccination or a negative test result taken within 72 hours of arrival.

The GRA will schedule meetings with the entire GA Congressional delegation.

To register, visit conference.restaurantsact.com. Attendees who register before February 1 will receive an early bird discount of 50% off conference pricing.

Contact Daniel New, Director of Advocacy, for more information on how you can get involved and attend.