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The IRS calls for extensive see DOL Temporary Rule §826.100
documentation for these COVID-19 (85 Fed. Reg. 19326 (April 6, 2020))). Over 100 FAQs about
employment tax credits. For the ERC, The IRS FAQs on documenting the
the paid leave and
the requirements are provided in a paid leave credits are extensive.
notice that is binding guidance. For FAQ 4 provides that the employer credits were issued
the FFCRA paid leave credits, the must retain records and documentation
extensive documentation require- supporting each employee’s leave to by the IRS as well as
another 100 by the
ments are only in nonbinding FAQs support the credit claim. In addition,
(see Nellen, “Categorizing FAQs in employers must retain Form 941, Em-
the Guidance Sphere,” 52 The Tax ployer’s Quarterly Federal Tax Return, U.S. Department of
Adviser 60 (January 2021), available Form 7200, Advance Payment of Employ- Labor (DOL).
at tinyurl.com/evpacz83), which raises er Credits Due to COVID-19, and any
a question of whether these FAQs other filings requesting the credit (FAQ
go beyond what the public laws and 4, available at tinyurl.com/2yz8kvsb).
Sec. 6001 require. While the IRS an- FAQs 44 to 46a describe significant FAQ 46 states that records should be
nounced a new process to make some details for written records from the maintained for at least four years after
FAQs “authority” for Sec. 6662 pur- employee and employer (available at the date the tax was due or paid, which-
poses (IR-2021-202; Oct. 15, 2021), it tinyurl.com/9xwnsw). This documenta- ever is later. For the credit extension by
does not apply to all FAQs. The new tion includes: ARPA for April 1, 2021, through Dec.
process only raises the reliance possi- ■ A written leave request from the 31, 2021 (subsequently ended on Sept.
bility for FAQs issued as a news release employee with the employee’s name, 30, 2021, by the Infrastructure Invest-
and fact sheet on newly enacted legis- dates for the requested leave, the ment and Jobs Act, PL. 117-58, for
lation and “emerging issues.” For other COVID-19 reasons for the leave employers other than recovery startup
FAQs, such as ones about COVID-19 with written support, and a state- businesses), the statute of limitation was
employment credits, they are not bind- ment that the employee is unable to extended to five years. Thus, for any paid
ing law or authority (unless reissued as work or telework due to this reason. leave credit claimed during this time
a news release and fact sheet). ■ If the leave pertains to the need (per Secs. 3131(f)(6) and 3132(f)(6),
to care for a child, such as due to added by ARPA), records should be kept
FFCRA paid leave credits school closure, the written statement at least six years (this is also noted in
documentation must include the name and age of IRS FAQ 66).
The enacting legislation for the the child, the name of the school, While the DOL FAQs and tem-
paid sick and family leave under the and a statement that no one else is porary rule on documentation are
FFCRA provides that Treasury is to available to care for the child. not binding for the tax credits, it is
issue “regulations or other guidance ■ Documentation by the employer of interesting that the DOL states that
to minimize compliance and record- how the qualified wages and credits the information from the employee can
keeping burdens under this section” were computed (Form 941 includes be provided either orally or in writing.
(P.L. 116-127, Sec. 7001(f)(2); see worksheets that should help with However, these DOL FAQs add that
also Sec. 7004(d)(2)). No regulations, this). employees must provide written docu-
revenue ruling, revenue procedure, or ■ Copies of Forms 941 and 7200. mentation to support leave per “IRS
notice was issued on recordkeeping or FAQs 64 to 67, pertaining to the forms, instructions, and information”
documentation for the FFCRA paid paid leave credits as extended and (see DOL FAQ 16, available at tinyurl.
leave credits. modified by the American Rescue com/26manzbe).
Over 100 FAQs about the paid Plan Act (ARPA), P.L. 117-2, call for
leave and credits were issued by the similar written documentation with ERC documentation
IRS as well as another 100 by the U.S. supporting proof (available at tinyurl. IRS guidance on how to document
Department of Labor (DOL). The com/36c6h83x). They also cover leave the ERC is also in a Q&A, but this
DOL administered compliance with for new reasons added by ARPA, information is binding guidance, as it is
the mandatory nature of the paid leave including to obtain a vaccination or published in Notice 2021-20 (Section
for 2020, not eligibility for the tax recover from one; documentation for III. N., Q&A 70). These records should
credits (see DOL FAQs 15 and 16, such leave should include the date prove that the employer is eligible
available at tinyurl.com/26manzbe; also of vaccination. and paid qualified wages. This notice

www.thetaxadviser.com January 2022 37