Restaurant Impact Survey & Tax Deduction Debate for PPP Recipients

November 24, 2020
Massachusetts Restaurant Association
Governor Baker addresses rumors of a possible shutdown:

During today's press conference when asked whether Massachusetts data indicated a need to reconsider a statewide indoor dining shutdown, Baker said "that the data doesn’t show a need at this time."
We continue to hammer home the point that restaurants are not the problem, especially here in MA. We will continue to advocate every day on your behalf and will keep you informed as information becomes available.
National Restaurant Association’s Latest Coronavirus Impact Survey 

We urgently need Congress to pass relief. We need the Biden Administration to understand what our industry will look like as they develop their 100 day plan. We need data to help make this happen.
Please complete the new Coronavirus restaurant impact survey. The MRA is partnering with the National Restaurant Association to gather critical data that will be very valuable to our ongoing advocacy and communications efforts during this crisis. 

We very much appreciate you taking the time to complete it.  Please note this survey will stay open until COB on Monday, Nov. 30th 

Take the survey here:
Reminder: License renewal process

License renewal paperwork must be signed and submitted to local license authorities by November 30. With everything else going on, operators do not want to have to go through the licensing process again if they fail to properly renew.
Treasury/IRS Warn PPP Recipients Not to Take Tax Deductions

Due to the evolving PPP loan forgiveness process, many restaurants and their tax advisers were planning to wait on applying for loan forgiveness until 2021. This way, a restaurant could 1) deduct their standard tax expenses for tax year 2020, 2) apply for PPP loan forgiveness in 2021 to evaluate how much is forgiven/deductible, and then 3) address any future tax liability on PPP forgiveness and deductions in late 2021/2022 filings. Most importantly, this would retain working capital during the ongoing COVID-19 crisis.
Treasury/IRS ended this possibility with guidance on November 18, saying that “if a business reasonably believes that a PPP loan will be forgiven in the future, expenses related to the loan are not deductible, whether the business has filed for forgiveness or not.”
A restaurant that received a PPP loan and paid otherwise deductible expenses (payroll, rent or mortgage, utilities) during the covered period may not deduct those expenses for tax year 2020 even if the restaurant has not submitted an application for loan forgiveness by the end of tax year 2020. If the restaurant “reasonably expects to receive forgiveness,” it automatically loses these tax deductions, hypothetically over a 24-week period, due to the 10 week loan.
To protect deductions and reverse this current IRS position, Congress has bipartisan, bicameral legislation (S. 3612/H.R. 6821) that needs your support.