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U.S. Chamber Asks IRS to Reverse Course on Virus Tax Break FAQs

May 1, 2020, 8:46 PM

Treasury and the IRS should modify recent FAQs to allow employers who continued to provide health care benefits to furloughed employees to claim a tax break enacted by a recent coronavirus relief law, the U.S. Chamber of Commerce said.

The agency in guidance updated Wednesday said employers can’t claim the employee retention tax credit (ERTC) for health care expenses they continue to pay on behalf of their employees if they aren’t paying any other wages. The Joint Committee on Taxation in its description of the tax break said Treasury and the IRS had the authority to take the opposite position.

  • “The Chamber strongly urges that the Treasury Department avail itself of this broad grant of authority to ensure these employers are eligible for the ERTC,” the chamber said in a Friday letter to Treasury Secretary Steven Mnuchin.
  • “Punishing employers who have continued to provide furloughed employees health care benefits during a global pandemic is simply poor public policy,” the chamber said.
  • The employee retention credit is a refundable credit worth up to $5,000 per employee that is meant to encourage businesses to keep workers on their payroll during the coronavirus pandemic.

To contact the reporter on this story: Allyson Versprille in Washington at aversprille@bloombergtax.com

To contact the editors responsible for this story: Patrick Ambrosio at pambrosio@bloombergtax.com; Colleen Murphy at cmurphy@bloombergtax.com

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