Strategizing Multinational Tax Risks

IRS has agreed to reverse its FAQ decision in which it denied the benefits of the Employee Retention Tax Credit for health care expenses of furloughed employees that were not receiving a salary for not working.

This is a welcome change, as it conforms to the intent of the Cares Act, Joint Committee on Taxation and Senate Finance Committee.

It is hopeful they will also revise their distinction of benefits for “essential” and “non-essential” businesses.

As a reminder, the FAQ’s do not have legislative authority and are at the lowest level of guidance, which begins with the Internal Revenue Code and Regulations.

https://www.finance.senate.gov/chairmans-news/following-bipartisan-request-treasury-modifies-employee-retention-tax-credit-eligibility-for-employers-providing-health-benefits-for-furloughed-employees