Employee Retention Tax Credits – New IRS Q&As Shed Light on Gray Areas

The Internal Revenue Service (IRS) recently released new guidance, in the form of Q&As posted on its website, on the Employee Retention Tax Credit (ERTC) provisions contained in Section 2301 of the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

This alert reviews some highlights from the Q&As as posted by the IRS on April 29, 2020. Unfortunately, some of the guidance is more restrictive than anticipated. This alert also discusses the legal significance of the Q&As, which is not very clear.

As discussed below, some employers may face difficult decisions in relation to the claiming of the tax credits.