Monthly Archives

May 2021

A Return to Pre-Pandemic Tax Rules

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In response to the pandemic that has affected us all, several temporary changes were made to the rules that govern our tax obligations. Many of these temporary changes are due to expire in 2021, so you may need to adjust your plans in the upcoming year. Here are some changes to be aware of.

  • Required minimum distributions. If you are age 72 or older, you must once again plan to take the minimum required distribution from your retirement account in 2021. The one-year waiver of this required distribution is now over.
  • Penalty-free distributions from retirement accounts. While penalty-free distributions from retirement accounts is still available for those in presidentially declared disaster areas, the distribution benefit for pandemic related reasons is expiring. Remember, if you had to make withdrawals you will need to pay income tax on the distributions unless you repay the funds in a timely manner.
  • Unemployment taxation. Federal unemployment benefits continue to be extended through various federal spending programs. Late breaking rules make $10,200 of last year’s unemployment benefits tax-free on most federal tax returns. But that doesn’t mean you won’t be taxed on these benefits this year. If there are not withholdings from these payments, you may be required to send in estimated tax payments.
  • New opportunities for businesses. While the original PPP loan program is now in forgiveness mode, there are new loans and active programs to help cover the cost of employees affected by the pandemic. The best course of action is to stay aware of ever-changing federal and state landscape.

Rules and benefit programs relating to the pandemic are not over, but they are changing. Our office can help you stay abreast of the changes that affect you, so that you aren’t caught unaware.

Registration Now Open for Restaurant Revitalization Fund

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The U.S. Small Business Administration launched the registration portal for the $28.6 billion Restaurant Revitalization Fund (RRF) on April 23, and is now accepting applications for the program.

Restaurants and other food providers hard-hit during the COVID-19 pandemic have been anxiously awaiting direct aid to help them recover after more than a year of government-imposed closures and dramatic reductions in sales. The RRF will award restaurants with grants equal to their pandemic-related revenue loss, up to $10 million per business and no more than $5 million per physical location.

All eligible restaurants are now able to submit applications, but for the first 21 days the SBA will prioritize reviewing applications from small businesses owned by women, veterans, and socially and economically disadvantaged individuals.

After the first 21 days, the SBA will fund all eligible applications on a first-come, first-serve basis, so the agency is recommending that all eligible entities submit applications as soon as the portal opens.

Eligible entities for the RRF include the following:

  • Restaurants;
  • Food stands, food trucks, and food carts;
  • Caterers;
  • Bars, saloons, lounges, and taverns;
  • Snack and nonalcoholic beverage bars;
  • Bakeries, brewpubs, tasting rooms, taprooms, breweries, microbreweries, wineries, and distilleries at which on-site sales to the public comprise at least 33% of the gross receipts;
  • Inns at which on-site sales of food and beverages to the public comprise at least 33% of gross receipts; and
  • Licensed facilities or premises of a beverage alcohol producer where the public may taste, sample, or purchase products.

RRF funds may be used for specific expenses, including:

  • Business payroll costs, including sick leave;
  • Payments on any business mortgage obligation;
  • Business rent payments, not including prepayment of rent;
  • Business debt service, both principal and interest, not including any prepayment of principal or interest;
  • Business utility payments;
  • Business maintenance expenses;
  • Construction of outdoor seating;
  • Business supplies, including protective equipment and cleaning materials;
  • Business food and beverage expenses, including raw materials;
  • Covered supplier costs; and
  • Business operating expenses.

How to apply

Eligible businesses can apply through SBA-recognized third-party point-of-sale vendors or directly through the SBA using the online application portal. Registration with is not required, and DUNS or CAGE identifiers are not necessary to apply for funding.

To verify tax information, businesses will be required to submit IRS Form 4506-T, Request for Transcript of Tax Return, completed and signed by the applicant. This requirement can be satisfied by completing this form on the SBA platform.

For gross receipts and eligible expenses documentation, any of the following documents may be submitted:

  • Business tax returns (IRS Form 1120, U.S. Corporation Income Tax Return, or IRS Form 1120-S, U.S. Income Tax Return for an S Corporation);
  • IRS Form 1040, U.S. Individual Income Tax Return, Schedule C, Profit or Loss From Business; IRS Form 1040, Schedule F, Profit or Loss From Farming;
  • For a partnership, the partnership’s IRS Form 1065, U.S. Return of Partnership Income (including Forms K-1, Partner’s Share of Income, Deductions, Credits, etc.);
  • Bank statements;
  • Externally or internally prepared financial statements such as income statements or profit-and-loss statements; and
  • Point-of-sale reports, including IRS Form 1099-K, Payment Card and Third Party Network Transactions.

If you have questions about the Restaurant Revitalization Fund and whether your business qualifies, or if you need help with your application, please contact our office.