Did you know that restaurant operators who had Payroll Protection Program (PPP) loans forgiven may lose some key tax deductions, creating a surprise tax liability and that the majority of restaurants might not be eligible for a new round of PPP funding? These two critical issues are why you need to act now.
As Congress tries to move towards agreement on a final COVID relief package, plans have emerged for a new round of PPP funding that would require businesses to demonstrate a 50% loss of revenue. According to recently released data, 55% of restaurants that are losing money would not be eligible for this new funding! Congress must fix the legislation to ensure that more restaurants — the hardest hit businesses by the COVID-19 pandemic — are eligible.
When Congress created PPP, its intent was for business expenses paid by PPP to be tax deductible. However, guidance from the IRS says that expenses paid for with a forgiven loan are now taxable.
Take action now to help protect restaurants from surprise tax liabilities!
Restaurants across the country may soon face surprise tax liability when they can least afford it. Some restaurants have indicated that this surprise tax liability could be the final factor that causes them to close. Congress must make business expenses paid for by PPP tax deductible.
Congress needs to hear from restaurants now. Negotiations are ongoing for this final relief package, and time is of the essence!
Thank you for all that you do for the industry!