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As National Restaurant Association Struggles to Provide Assistance for Establishments, It Turns to the IRS
A program designed to provide restaurants with financial assistance during the COVID-19 pandemic led to delays for the National Restaurant Association and its state-level affiliates when it comes to taxes. Now, the organization is asking the IRS for a grace period.
Brands around the country continue to feel the economic impact of the COVID-19 pandemic. Restaurant Business Online reported that the National Restaurant Association and its 52 state-level affiliates have asked the Internal Revenue Service (IRS) to adjust its tax collection process for restaurants in light of the fact that 83% of restaurant brands who applied for the Employee Retention Tax Credit have yet to see the money.
The Employee Retention Tax Credit (ERTC) allowed companies whose operations were disrupted by COVID shutdowns during 2020 to a credit of up to 50% of every full-time employee’s compensation, with a maximum of $5,000 per worker. However, with most of those restaurants yet to receive the advance refunds, the National Restaurant Association is asking the IRS to delay that tax collection as the government organization itself is behind in processing the requests for the advance credits.
“The ERTC has been a critical recovery tool for hundreds of thousands of restaurants, but far too many are still waiting for their refund from the federal government,” said Sean Kennedy, the executive vice president of public affairs for the National Restaurant Association. “As Tax Day approaches, many restaurants are about to be told to overpay their taxes, with the promise of a refund later. The system can work better for an industry on the ropes, and we are pressing the IRS and Treasury to act on our commonsense solutions.”
The program allowed many restaurants to breathe a sigh of relief, as they were one of the industries most affected by the pandemic and are still trying to recover. However, as many of them continue to wait to see the advance, the industry continues to struggle with guest numbers going down due to rising inflation and ongoing supply chain issues.
To help with the economic recovery in the meantime, many franchise brands have announced menu price increases and have predicted that price increases will be required in the months to come.
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