U.S. Small Business Administration Awarding Funding Through the Restaurant Revitalization Funding Program

On March 11, 2021, the American Rescue Plan Act (ARPA) was announced as public law (P.L. 117-2) Section 5003, which appropriated $28.6 billion for the U.S. Small Business Administration (SBA) to award as funding to restaurants, bars, and other similar places of business that serve food or drink. Recipients are not required to repay the funding as long as funds are used for eligible uses no later than March 11, 2023.

Who is Eligible?

Eligible entities are businesses not permanently closed and include businesses where the public or patrons assemble for the primary purpose of being served food or drinks. Some examples include restaurants, food stands, food trucks, food carts, caterers, bars, saloons, lounges, taverns, and snack/nonalcoholic beverage bars. Bakeries, brewpubs, tasting rooms, taprooms, breweries, microbreweries, wineries, and distilleries must show documentation with their application that on-site sales to the public comprised at least 33% of gross receipts in 2019. Restaurants and bars also need to meet this 33% test, but do not appear to have a requirement to submit documentation with their application.

Per the SBA Program Guide (as of April 20, 2021), “Those entities without additional documentation requirements, such as restaurants and bars, are presumed to have on-site sales to the public comprising at least 33% of gross receipts in 2019. All applicants must attest in the application to the following: “The Applicant is eligible to receive funding under the rules in effect at the time this application is submitted.””

Where to Apply

The SBA is providing three ways of applying for the funding:

  1. Through an SBA recognized Point of Sale Restaurant Partners
  2. Directly through SBA Form 3172
  3. By calling SBA directly at (844) 279-8898

Currently the SBA has set registration for the application portal to begin on Friday, April 30, 2021, at 9:00 a.m. ET and application will open on Monday, May 3, 2021, at noon ET.

When to Apply

The SBA will start accepting applications from eligible participants after the pilot program has ended. The application process will be open to all who are eligible to receive funding, but for the first 21 days they will only process and fund those in the priority groups. The priority group is defined as those who are at least 51 percent owned and controlled by individuals who are women, veterans, and/or socially and economically disadvantaged individuals. After the initial 21-day period, the SBA will begin to process applications for all eligible participants.

The funding is on a first come, first serve basis, and the SBA has stressed the importance of applying as soon as possible as demand may exceed available funding. 

Funding Amounts

The funding amounts for eligible participants are as follows:

  • Calculation 1: For applicants in operation prior to or on January 1, 2019.
    • 2019 gross receipts minus 2020 gross receipts minus PPP loan Amounts
  • Calculation 2: For Applicants that began operations partially through 2019.
    • (Average 2019 Monthly gross receipts x 12) Minus 2020 gross receipts minus PPP Loan Amounts
  • Calculation 3: For Applicants that began operations on or between January 1, 2020 and March 10, 2021 and applicants not yet opened but will have eligible expenses incurred.
    • Amount Spent on eligible expenses between February 15, 2020 and March 11, 2021 minus 2020 Gross receipts minus 2021 gross receipts (through March 11, 2021) minus PPP loan amounts

Gross receipts for the purpose of this program does not include:

  • Amounts received from Paycheck Protection Program (PPP) Loans (First draw or Second draw)
  • Amounts received from Economic Injury Disaster Loans or Grants
  • State and Local grants (via CARES Act or otherwise)
  • SBA Section 1112 payments

Allowable Use of Funds

Funds may be used for specific expenses including business payroll costs, payments on any business mortgage obligation, business rent payments, business debt services, business utility payments, business maintenance expenses, construction of outdoor seating, business supplies, business food and beverage expenses, covered supplier costs, and business operating expenses.

Documentation Required

For all applicants, a completed SBA Form 3172, verification of tax information IRS Form 4506-T and gross receipts documentation which includes but not limited to tax returns, bank statements, etc.

In Summary

The SBA is awarding funding for those eligible applicants that have been affected by the COVID-19 pandemic. Participants will be required to report, no later than December 31, 2021, via the application portal, how much of the grant has been spent on each category of eligible use of funds. Click on the links below access the SBA RRF Program Guide and RRF Sample Application:

It is indicated in the American Rescue Plan that amounts received from SBA in the form of a Restaurant Revitalization Funding grant shall not be included in the gross income of the entity that receives such funds. In addition, no deduction shall be denied, no tax attribute shall be reduced, and no basis increase shall be denied by reason of the exclusion from gross income provided above.

How We Can Help

Our team is available to assist you during the process of filing for the SBA Restaurant Revitalization Funding. We will update you with any changes to the program or application when released by the SBA. Please contact your trusted Scheffel Boyle team member with questions. We are always here to help!

Blog Header Image with the headline "IRS Extends IRA, HSA Contribution Deadline to May 17, 2021."

IRS Extends IRA, HSA Contribution Deadline to May 17, 2021

On Tuesday, March 30, the Internal Revenue Service provided another deadline postponement for taxpayers making certain contributions.

In extending the deadline to file Form 1040 series returns to May 17, 2021 the IRS is postponing to the same date the time for individuals to make the following 2020 contributions:

  • Individual retirement arrangements (IRAs and Roth IRAs)
  • Health savings accounts (HSAs)
  • Archer Medical Savings Accounts (Archer MSAs), and
  • Coverdell education savings accounts (Coverdell ESAs).

Finally, the IRS again stated that the due date for 2021 1st quarter estimates has not been extended and remains due April 15, 2021.

For additional guidance on this extension, feel free to contact your preferred office. We are here to help!

Individual Tax Filing Deadline Extended to May 17, 2021

On Wednesday, March 17, the U.S. Treasury Department and Internal Revenue Service announced that the federal income filing date for individuals for the 2020 tax year will be automatically extended from April 15, 2021, to May 17, 2021. In addition, any balance due payment for the 2020 tax year is now due on May 17, 2021, instead of April 15, 2021. In line with the federal extension and payment due dates, the Illinois Department of Revenue and Missouri Department of Revenue have also extended individual income tax filing and payment deadlines from April 15, 2021, to May 17, 2021.

First Quarter 2021 Federal and State Estimated Tax Payments

The May 17, 2021 filing and payment of balance due extensions for 2020 individual tax returns do not apply to the first quarter estimated tax payments for tax year 2021. These tax payments remain due on April 15, 2021.

Corporations, Trusts, and Estates

The May 17, 2021 extensions as noted above do not extend the due date of C-Corporations, trust returns, and estate returns and are still due by April 15, 2021.

Hours of Operation

At Scheffel Boyle, our experienced tax professionals have been working extended hours. As such, our offices will continue to operate with our extended hours until April 15. We urge our clients to continue to bring in their tax information to our offices and we will keep you informed.

As always, feel free to contact your preferred office if you have any questions or require additional assistance. We are here to help!

President Biden Signs American Rescue Plan Act

Last Thursday, President Joe Biden signed the American Rescue Plan Act into law. The $1.9 trillion coronavirus relief bill includes several different provisions such as $1,400 stimulus checks for individuals, extended unemployment benefits, and aid for small businesses and not-for-profits. Click here to read the full text of the law.

We encourage you to reach out our professionals for questions about these provisions. We are here to help!

A summary of key provisions from the final bill is as follows:

Individual Provisions

  • Recovery Rebate Credits/Stimulus Checks
    • Taxpayers with adjusted gross income (AGI) under $75,000 will receive $1,400 direct payments. Married taxpayers filing jointly with AGI up to $150,000 will receive $2,800
      • Eligible taxpayers will also receive $1,400 for each dependent
      • Advance payments of the credits will be sent as economic impact payment checks
  • Unemployment Benefits
    • The first $10,200 in unemployment benefits for taxpayers earning less than $150,000 per year is now tax-free effective for the 2020 tax year
    • If you have already filed for 2020, you will need to file an amended return.
    • Extends weekly federal benefit of $300 a week through September 6, 2021
    • Extends pandemic unemployment benefits for gig workers and self-employed individuals
  • Premium Tax Credit (Related to Health Insurance)
    • Expands the Premium Tax Credit for 2021 and 2022 by changing the applicable percentage amounts
    • Taxpayers who have received too much in advance premium tax credits in 2020 will not have to repay the excess amount
    • A special rule is added that treats a taxpayer who has received, or has been approved to receive unemployment compensation for any week beginning during 2021 as an applicable taxpayer
  • Earned Income Tax Credit
    • The credit would be allowed for certain separated spouses
    • Threshold for disqualifying investment income raised from $2,200 to $10,000
    • Taxpayers are allowed to use their 2019 income instead of 2021 income in figuring the credit amount
  • Child Tax Credit
    • Expands the Child Tax Credit by:
      • Making the credit fully refundable for 2021;
      • Making 17-year-olds eligible as qualifying children for 2021 only; and
      • Increases the amount of the credit to $3,000 per child ($3,600 for children under 6)
    • The Child Tax Credit would phase out for taxpayers with income over $150,000 for married taxpayers filing jointly, $112,000 for heads of households, and $75,000 for others
    • Payments of 50% of the credit can be received in advance and will run from July through December 2021. The IRS will create an online portal allowing taxpayers to opt out of advance payments or adding information that could modify the amount received
  • Child & Dependent Care Credit
    • The credit is fully refundable for 2021 only
    • The bill increases the exclusion for employer-provided dependent care assistance to $10,500 for 2021 ($5,250 for married filing separate)
    • The max credit is now worth 50% of eligible expenses up to a limit based on income, making the credit worth up to $4,000 for one qualifying individual or up to $8,000 for two or more.
    • Credit reduction begins at AGI over $125,000. For households over $400,000, the credit can be reduced below 20%.
  • Family & Sick Leave Credits
    • Extends credits established by the Families First Coronavirus Response Act until September 30, 2021
    • The fully refundable credits against payroll taxes compensate employers and self-employed people for coronavirus-related paid sick leave and family and medical leave
    • Increases the limit on the credit for paid family leave to $12,000
    • The number of days a self-employed individual can take into account in calculating the qualified family leave equivalent amount for self-employed individuals increases from 50 to 60
    • Paid leave credits will be allowed for leave that is due to COVID-19 vaccination
    • The limitation of overall days taken into account for paid sick leave will reset after March 31, 2021
    • Credits are expanded, allowing 501(c)(1) governmental organizations to take them
  • Student Loans
    • The act specifies that gross income does not include any amount that would otherwise be included in income due to the discharge of any student loan after Dec. 31, 2020, and before Jan. 1, 2026

Business Provisions

  • Paycheck Protection Program (PPP)
    • Allocates an additional $7.25 billion for PPP forgivable loans; applications scheduled to close on March 31, 2021
  • Restaurant Revitalization Fund (RRF)
    • Allocates $28.6 billion for food and beverage establishments
    • RRF grants equal to the pandemic-related revenue loss of the entity, up to $10 million per entity, or $5 million per physical location (limited to 20 locations)
    • RRF grants are calculated by subtracting 2020 revenue from 2019 revenue and can be used for certain eligible expenses including: payroll costs, mortgage payments, rent, utilities, maintenance expenses; supplies, food and beverage expenses; covered supplier costs; operational expenses; paid sick leave; and any other expense determined to be essential to maintaining the business.
    • Sets aside $5 billion for eligible applicants with 2019 gross receipts of $500,000 or less
    • During the first 21 days of the grant period, the SBA will prioritize applications from restaurants owned and operated or controlled by women, veterans, or socially and economically disadvantaged individuals
    • Funds from RRF grants should not be included in the gross income of the person who receives the grant
  • Economic Injury Disaster Loan (EIDL)
    • Allocates $15 billion to Targeted EIDL grants to businesses located in low-income communities that have no more than 300 employees and have suffered an economic loss more than 30% of gross receipts
    • Funds from Targeted EIDL grants should not be included in the gross income of the person who receives the grant
  • Employee Retention Credits (ERC)
    • Allows eligible employers to claim a credit for paying qualified wages to employees
    • Extends the program through the end of 2021
  • Shuttered Venue Operators (SVO) Grant
    • Allocates $1.25 billion to the SVO grant program

SBA issues interim final rule revisions to PPP

The U.S. Small Business Administration recently laid out its interim final rule revisions to the Paycheck Protection Program. These changes, which are effective immediately, relate to maximum loan amount calculations and program eligibility and apply to PPP loans approved after the effective date of the rule.

The SBA will be accepting PPP loan applications through March 31, 2021.

The key interim final rule revisions to the Paycheck Protection Program are as follows:

  • Individuals who file an IRS Form 1040, Schedule C can calculate their maximum loan amount using gross income instead of net profits
    • At this time, Schedule C borrowers cannot increase the amount of a PPP loan they have already applied for, received, or had forgiven by the SBA
    • With this revised funding formula, First Draw Schedule C borrowers with over $150,000 in gross receipts are subject to review of the good faith loan necessity certification
  • Removes eligibility restriction that prevented business owners who have non-financial fraud felony convictions in the last year from obtaining PPP loans
  • Removes eligibility restriction that prevented businesses with owners who are delinquent or in default of their federal student loans from obtaining PPP loans

In addition to the eligibility and calculations updates, the SBA also provided revisions for six application forms, including:

  • Updated PPP borrower first-draw (Form 2483) and second-draw (Form 2483-SD) application forms
  • PPP first-draw (Form 2483-C) and second-draw (Form 2483-SD-C) borrower application forms for Schedule C filers using gross income
  • A revised lender application form for PPP loan guaranty (Form 2484)
  • A revised PPP second-draw lender application form (2484-SD)

If you have any questions about these changes, the program, or if you have any additional concerns, please contact one of our trusted professionals at Scheffel Boyle. We are here to help!

House passes $1.9 trillion COVID-19 relief package

The U.S. House of Representatives passed the latest COVID-19 relief package early Saturday morning. The bill, titled The American Rescue Plan Act of 2021, H.R. 1319), includes several different provisions such as $1,400 stimulus checks for individuals, extended unemployment benefits, and aid for small businesses and not-for-profits. Click here to view the full text of the bill.

The bill is anticipated to be signed before March 14, when current extended unemployment benefits are set to expire.

At the time this blog was posted, these provisions have not been signed into law. Additional revisions may also be made to the bill by the Senate before their deciding vote. We encourage you to reach out to one of our professionals for questions about these provisions. We are here to help!

A summary of key provisions from the proposed bill is as follows:

Individual Provisions

  • Recovery Rebate Credits/Stimulus Checks
    • Taxpayers with adjusted gross income (AGI) under $75,000 individually will receive $1,400 direct payments. Married taxpayers filing jointly earning up to $150,000 will receive $2,800.
      • Eligible taxpayers will also receive $1,400 for each dependent.
    • Eligibility is calculated using 2019 AGI unless a taxpayer has already filed a 2020 return.
    • Advance payment of the credits will be sent as economic impact payment checks.
  • Unemployment Benefits
    • Extends pandemic unemployment benefits for gig workers and long-term unemployment through August 2021
    • Increases state benefits by $400 per week, up from $300
    • Increases the total number of weeks eligible for the supplement to 73 weeks from 50 weeks
  • Premium Tax Credit (Related to Health Insurance)
    • A special rule is added that treats a taxpayer who has received, or has been approved to receive unemployment compensation for any week beginning during 2021 as an applicable taxpayer
  • Child Tax Credit
    • Expands the Child Tax Credit by:
      • Making the credit fully refundable for 2021;
      • Making 17-year-olds eligible as qualifying children; and
      • Increasing the amount of the credit to $3,000 per child ($3,600 for children under 6).
    • The Child Tax Credit would phase out for taxpayers with income over $150,000 for married taxpayers filing jointly, $112,500 for heads of households, and $75,000 for others
  • Child & Dependent Care Credit
    • Expands the Child & Dependent Care Credit by:
      • Making the credit fully refundable for 2021; and
      • Increases the exclusion for employer-provided dependent care assistance to $10,500 for 2021.
    • Family & Sick Leave Credits
      • Extends credits established by the Families First Coronavirus Response Act until September 30, 2021
      • Increases the limit on the credit for paid family leave to $12,000
      • The number of days a self-employed individual can take into account in calculating the qualified family leave equivalent amount for self-employed individuals increases from 50 to 60
      • Paid leave credits will be allowed for leave that is due to COVID-19 vaccination
      • The limitation on overall number of days taken into account for paid sick leave will reset after March 31, 2021
      • Credits are expanded, allowing 501(c)(1) governmental organizations to take them

Business Provisions

  • Paycheck Protection Program (PPP)
    • Allocates additional $7.25 billion for PPP forgivable loans; applications scheduled to close on March 31, 2021
    • Makes more not-for-profit organizations eligible
    • Some larger not-for-profit organizations are also now eligible to apply for PPP loans
    • Internet-only news and periodic publishers with more than one physical location are now eligible
  • Restaurant Revitalization Fund (RRF)
    • Allocates $25 billion for food and beverage establishments
    • RRF grants equal to the pandemic-related revenue loss of the entity, up to $10 million per entity, or $5 million per physical location (limited to 20 locations)
    • RRF grants are calculated by subtracting 2020 revenue from 2019 revenue and can be used for certain eligible expenses:
    • Sets aside $5 billion for eligible applicants with 2019 gross receipts of $500,000 or less
    • During the first 21 days of the grant period, the SBA will prioritize applications from restaurants owned and operated or controlled by women, veterans, or socially and economically disadvantaged individuals
    • Funds from RRF grants shall not be included in the gross income of the person who receives the grant
  • Economic Injury Disaster Loan (EIDL)
    • Allocates $15 billion to Targeted EIDL grants to businesses located in low-income communities that have no more than 300 employees and have suffered an economic loss more than 30% of gross receipts
    • Funds from Targeted EIDL grants shall not be included in the gross income of the person who receives the grant
  • Employee Retention Credits (ERC)
    • Extends the ERC through the end of 2021
  • Shuttered Venue Operators (SVO) Grant
    • Allocates $1.25 billion to the SVO grant program

Webinar Replay Now Available: Paycheck Protection Program & Employee Retention Credits

On January 27, the professionals of Scheffel Boyle CPAs explained the latest updates of the Paycheck Protection Program (including changes related to farmers) and Employee Retention Credits. There was a Q&A session at the end of the presentation.

A replay of our webinar is now available to watch on demand on Zoom. Please fast forward to 5:28 on the recording to begin the presentation. A document containing the slideshow is also available for download and can be accessed by clicking here (PDF).

  Paycheck Protection Program & Employee Retention Credits Webinar Presentation (PDF)

 

Free Webinar: Paycheck Protection Program & Employee Retention Credits

Join the professionals of Scheffel Boyle CPAs as they explain the latest updates of the Paycheck Protection Program (including changes related to farmers) and Employee Retention Credits. There will be a Q&A session at the end of the presentation.

Click here to register. There is no fee to attend the webinar, but registration is required. This event is open to the first 500 who register, so sign up today!

Download the Webinar Flyer

President Trump Signs Coronavirus Relief and Government Funding Bill

President Trump Signs Coronavirus Relief and Government Funding Bill

On Sunday, December 27, President Trump signed the COVID-19 relief and government funding bill into law. The Coronavirus Response and Relief Supplemental Appropriations Act of 2021 has the following key provisions:

  • Clarification on the deductibility of expenses paid with forgiven PPP loans
  • Additional PPP funding for certain businesses
  • Extends certain tax credits for payroll and sick leave
  • Direct stimulus payments to individuals
  • Extended unemployment benefits

For more details on these key provisions and others, please see our earlier blog regarding the bill by clicking here: Congress Passes COVID-19 Bill, Waiting on the President’s Signature

We will continue to monitor the updates related to this bill and send out additional information as it becomes available. Please reach out to your trusted Scheffel Boyle team member with questions. We are here to help!

Congress Passes the Coronavirus Response and Relief Supplemental Appropriations Act of 2021

Congress Passes COVID-19 Relief Bill, Waiting on the President’s Signature

The U.S. Senate and House of Representatives passed a $900 billion COVID-19 relief bill Monday night. The Coronavirus Response and Relief Supplemental Appropriations Act of 2021, as it has been named, still needs to be signed by the President and is not law at this time.

A summary of the key terms of the proposed bill is as follows:

Business Provisions

  • Paycheck Protection Program (PPP)
    • It clarifies that businesses can deduct expenses paid with forgiven PPP loans. This applies to the original round of PPP loans and now this new round of PPP loans.
    • The bill provides an additional $284 billion in funding for round two of PPP loans.
    • Who is eligible for round two?
      • First-time qualified borrowers with 500 or fewer employees
      • Businesses that previously received a PPP loan in round one who specifically have 300 or fewer employees; have used or will use the full amount of their first PPP loan; and can show a 25% gross revenue decline in certain 2020 quarters compared with the same quarter in 2019
    • The bill expands eligibility for certain nonprofits (for example, Chamber of Commerce and Churches) and includes set-asides for very small businesses and community-based lenders.
    • Maximum loan size for round two PPP loans is $2 million.
    • The bill makes additional expenses eligible for loan forgiveness besides payroll, rent, mortgage interest and utilities. The bill changed the requirement to spend no less than 60% of the funds on payroll over the covered period. It also includes:
      • Covered worker protection and facility modification expenditures, including PPE to comply with COVID-19 federal health and safety guidelines
      • Expenditures to suppliers that are essential at the time of purchase
      • Covered operating costs such as software and cloud computing services and accounting needs
    • The bill creates a simplified forgiveness application process for loans of $150,000 or less. The U.S. Small Business Administration (SBA) must create the application within 24 days of the bill’s enactment.
    • Repeals the requirement that PPP borrowers deduct the amount of any Economic Injury Disaster Loan Program (EIDL) advance from their PPP forgiveness amount.
  • Provides new Economic Injury Disaster Loan Program (EIDL) grants for business in low-income communities.
  • Extends and expands the Employee Retention Tax Credit through July 1, 2021.
  • Expands the deduction for business meals to 100% for 2021 and 2022.
  • Extends the Families First Coronavirus Response Act (FFCRA) paid leave 100% tax credits through March 31, 2021. This does not extend the requirement, but it allows an employer to keep offering such leave.

Individual Provisions:

  • Economic impact payments of $600 for individuals making up to $75,000 per year and $1,200 for married couples making $150,000 per year, as well as a $600 payment for each dependent child.
  • Extended unemployment benefits $300 per week supplement from December 26 until March 14, 2021, an extra 11 weeks. It also extends the Pandemic Unemployment Assistance (PUA) program with expanded coverage to the self-employed, gig workers, and others in nontraditional employment.
  • Adjustments to how the Child Tax Credit and Earned Income Tax Credit are calculated for 2020. The calculation may be able to use 2019 income to determine an individual’s credit eligibility for the 2020 tax year.
  • The new above-the-line charitable contribution is extended through 2021 at $600 married filing jointly and $300 for all other filers.
  • Flexible Savings Accounts (FSA) balances can be rolled from the 2020 tax year into 2021. This could be helpful for any unused childcare expenses unable to be used in 2020.
  • Payroll tax deferral repayment by employees as been extended from April 2021 to December 31, 2021.

Our team is closely monitoring this situation as updates are released. Please reach out to your trusted Scheffel Boyle team member with questions. We are here to help!