Restaurants Can Take Advantage of Funding Opportunities Created by Interplay of Stimulus Laws

Multiple stimulus packages enacted since March 2020 have created, expanded and extended avenues for restaurants and the food-service industry to access funding during the COVID-19 pandemic. The intersection of these laws and provisions provide additional opportunities to offset some financial losses.

The passage of the American Rescue Plan Act in March 2021 impacted provisions from several previous COVID-19 stimulus laws, most notables the Coronavirus Aid, Relief and Economic Security (CARES) Act and the Consolidated Appropriations Act, 2021.

The most recent law also created a funding source for restaurants and food service businesses — one of the hardest-hit industries during the pandemic — with the $28.6 billion Restaurant Revitalization Fund.

Some changes were simply extensions of deadlines or expansions in eligibility, others affected tax credit percentages that potentially could save your business money while some could impact compliance requirements.

The following charts show the interplay of each of the laws and how provisions have been affected and is intended as an overview and resource to help you make more-informed decisions on what funding options suit your business needs.

It started with the CARES Act and the introduction of the Employee Retention Tax Credit. This credit could be claimed against 50% of wages paid, up to $10,000 annually per employee, between March 13 and Dec. 31, 2020, that were not forgiven or expected to be forgiven payroll costs, and can include a portion of the cost of employer provided health care. Although recent laws have expanded and extended the credit, if you claimed it on wages paid between the above dates, then the details of the provision at the time are in effect.

The Paycheck Protection Program also began under the CARES Act with the intent to provide funding — up to $10 million in loans per eligible borrower — to businesses with fewer than 500 employees to be used to cover payroll and other expenses such as mortgage, rent or utilities. These loans can be forgiven completely if funds are used for covered expenses and employers kept their employees working or hired back those who were laid off.