New legislation titled the Restaurant Revitalization Act has been introduced in the US Senate and House of Representatives. While the legislation is currently pending, components of it could be retroactive for early quarters of 2023, so it’s important for employers in the restaurant industry to understand what may be coming.
The Restaurant Revitalization Act would provide a credit for small restaurant employers against the employer share of 2023 Social Security and Medicare taxes. Employers that qualify would be eligible for a maximum credit of the total wages paid during all four quarters in 2023 (with a maximum quarterly credit of $25,000).
Eligible employers must meet the following criteria:
- Established before March 14, 2020
- Applied for a grant under the American Rescue Plan Act, section 5003©, but did not receive any grant funding due to a lack of available funds
- Paid employment taxes with respect to pay periods that occurred in at least two calendar quarters in 2021
- Meets a gross receipts test (defined further in the legislation)
The full credit amount will only be available to eligible employers with 10 employees or fewer. Employers with more than 10 employees will see a reduction in the credit by $2500 per employee in excess of 10. This effectively eliminates the credit for employers with 20+ employees.
We will continue to monitor updates to this introduced legislation and may update the article accordingly.
This article is informational and does not constitute legal or financial advice. Consult with an employment lawyer or accountant for additional clarification on how these changes impact your company.
