On May 11, the IRS updated FAQs 64 and 65 and added new FAQ 79. Q&As 64 and 65 now state that employers can claim the ERC for qualified health care expenses regardless of whether the employee is paid qualified wages.
The revised FAQs clarify this new interpretation with five examples in which qualified health care expenses paid to furloughed employees are considered qualified wages for purposes of the employee retention credit.
This is welcome news for employers and will encourage them to continue paying health plan expenses for employees on furlough.
