Tax credits for travel, hospitality, and trade shows to boost economic recovery.
The Act introduces several new tax credits aimed at supporting industries severely affected by the pandemic, such as tourism, hospitality, and event organization. Citizens can benefit from a refundable tax credit for domestic travel expenses, reducing the cost of personal and business trips. Businesses receive financial aid for reopening and adapting operations, alongside a temporary suspension of limits on deducting business entertainment expenses.
Key points
Travel Tax Credit: Individuals can claim a 50% refundable tax credit for qualified domestic travel expenses (at least 50 miles from home, including an overnight stay), up to $1,500 (plus $500 per child). Income limits apply ($75,000 for singles, $150,000 for joint filers).
Restaurant Industry Support: Restaurants and similar businesses are eligible for a tax credit covering costs incurred in reopening and adapting operations after COVID-19 closures (e.g., renovations, PPE, employee testing).
Convention and Trade Show Support: Businesses organizing or participating in qualified events can receive a tax credit for restart costs (100% for providers) and participation costs (50% for attendees) for conventions and trade shows held in the U.S. after 2021.
Temporary Suspension of Entertainment Limits: For 2021 and 2022, the 50% limit on deducting business entertainment and meeting expenses is suspended, provided the expenses are directly related to the active conduct of business.
Unmerchantable Inventory Credit: A temporary 90% tax credit is established for food and beverage businesses to cover costs related to inventory that became unsaleable (spoiled or expired) due to pandemic-related market changes between March and September 2020.
Expired
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