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DC Tax Flash: IRS Issues Expanded Guidance on Employee Retention Credit

Tax Alert

The Internal Revenue Service (IRS) has expanded its informal FAQ guidance on the Employee Retention Credit (ERC), which was enacted as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act (P.L. 116-136)

The ERC provides a refundable tax credit to eligible employers for certain employment taxes equal to 50 percent of up to $10,000 in qualified wages paid to employees, effective March 12, 2020 through December 31, 2020. Employers that access loans under the Payroll Protection Program (PPP) are not eligible for ERC.

The IRS' FAQs on the ERC posted late last month initially included fewer than 20 questions that covered just the basic mechanics of the credit. The expanded FAQs now include nearly 100 questions posed and answered on the following major issue areas:

The IRS notes on each of these pages that its FAQs are "not included in the Internal Revenue Bulletin, and therefore may not be relied upon as legal authority. This means that the information cannot be used to support a legal argument in a court case."

All FAQs on the ERC are posted here


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