The American Rescue Plan Act

The SBA might create a minimum grant amount of $1,000 for eligible entities. The maximum grant amount is $5M per location and $10M total for the eligible entity.

Yes. However, the RRFG will be reduced by the total amount of PPP Loans.

Any business-related interest payments on a mortgage or other debt obligation (excluding any prepayment or principal obligation) that was incurred before February 15, 2020.

Entities that can certify that they meet the definition of a woman-owned small business, veteran-owned small business, or socially and economically disadvantaged small business will be given priority for award if their application is filed with SBA within the first 21 days the application is open for submissions. Additional access may be defined in segments according to an entity’s annual gross receipts in 2019.

Click HERE to view how the SBA defines women-owned, veteran-owned, and socially and economically disadvantaged small businesses.

It is anticipated that SBA will deposit the funds directly to the bank account identified in the application.

An entity can receive a tax-free federal grant equal to the amount of its pandemic-related revenue loss, subtracted by the total amount it received in all PPP loans. 

• For entities opened before 2019: [Gross receipts of 2019] – [Gross receipts of 2020] – [ Total amount received in PPP loans (1st and 2nd Draw)] = Restaurant Revitalization Fund Grant 
• For entities opened during 2019: [Average monthly gross receipts of 2019 multiplied by 12] – [Average monthly gross receipts of 2020 multiplied by 12] – [Total amount received in PPP loans (1st and 2nd Draw)] = Restaurant Revitalization Fund Grant 
• For entities opened during 2020-2021: [Eligible expenses] – [Gross receipts received] – [Total amount received in PPP loans (1st and 2nd Draw)] = Restaurant Revitalization Fund Grant Aggregate grants made to an eligible entity, and any affiliated businesses of the eligible entity, are limited to $5M per physical location and $10M total for the eligible entity

Gross receipts mean all revenue in whatever form received or accrued from whatever source, including from the sales of products or services, interest, dividends, rents, royalties, fees, or commissions, reduced by returns and allowances. 

Generally, receipts are considered “total income” (or in the case of a sole proprietorship “gross income”) plus “cost of goods sold” as these terms are defined and reported on IRS tax return forms— this includes Form 1120 for corporations; Form 1120-S for S corporations; Form 1120, Form 1065 or Form 1040 for LLCs; Form 1065 for partnerships; Form 1040, Schedule C for other sole proprietorships. 

Receipts do not include net capital gains or losses; taxes collected for and remitted to a taxing authority if included in gross or total income, such as sales or other taxes collected from customers and excluding taxes levied on the concern or its employees; proceeds from transactions between a concern and its domestic or foreign affiliates; and amounts collected for another by a travel agent, real estate agent, advertising agent, conference management service provider, freight forwarder or customs broker. 

Subcontractor costs, reimbursements for purchases a contractor makes at a customer’s request, investment income, and employee-based costs such as payroll taxes are not excluded from receipts

• Payroll
• Payments of principal or interest on any mortgage obligation (excludes Prepayment of principal on a mortgage obligation)
• Rent (excludes prepayment of rent)
• Utilities
• Maintenance expenses such as construction to accommodate outdoor seating AND walls, floors, deck surfaces, furniture, fixtures, and equipment
• Supplies such as protective equipment and cleaning materials
• Food and beverage expenses that are within the scope of the normal business practice of the eligible entity before the covered period 
• Covered supplier costs
• Operational expenses 
• Paid sick leave
• Any other expenses that the SBA determines to be essential.

An eligible entity can use grant funds for eligible expenses incurred from February 15, 2020 until December 31, 2021. The SBA may extend this covered period an additional 14 months, until March 11, 2023, and has the authority to extend it up to 2 years after enactment of the RRFG program.

The National Restaurant Association is actively seeking clarity on this in federal regulations.

Grants will not be included as federal taxable gross income by the IRS.

Yes, the law states that “no deduction shall be denied, no tax attribute shall be reduced, and no basis increase shall be denied, by reason of the exclusion from gross income.”