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Washington, D.C. - Following Congressman Tom Emmer’s (MN-06) letter calling on the Treasury Department and the Internal Revenue Service (IRS) to provide flexibility for employers who continued paying their employees during the COVID-19 crisis, the IRS this week issued guidance allowing employers to qualify for the Employee Retention Credit under varying state and local guidance and recommendations.  

In his initial letter, Congressman Emmer noted that it was unclear which employers would qualify for the Employee Retention Credit. The Employee Retention Credit is included as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, and encourages companies to keep employees on their payroll by providing for a tax credit of 50% of up to $10,000 for paying employees while the business is impacted by COVID-19.

"I appreciate the swift work of this Administration to provide more certainty to employers who are just trying to weather this storm and keep their employees paid,” said Emmer. “The CARES Act provided for a variety of support mechanisms for employees and individuals during this crisis. This additional guidance will help employers determine whether they will qualify for this credit, and help countless Americans remain employed."


Congress provided for broad applicability of the Employee Retention Credit in the CARES Act due to the changing nature of the Coronavirus threat. However, it was unclear whether employers who have reduced operations due to national, state, and local recommendations would qualify for the credit without receiving a specific order to close operations, despite continuing to pay these employees. The letter urged the Department of Treasury and IRS to take a broad interpretation when defining what employers are eligible and what wages qualify for the Employee Retention Credit. 

Read Congressman Emmer’s initial letter here