IRS Creates Safe Harbor for Employee Retention Credit Applicants

Businesses applying for an employee retention tax credit will now have a safe harbor option allowing them to exclude certain items from their gross receipts in determining eligibility for the program.

The Internal Revenue Service released guidance (Rev. Proc. 2021-33) Tuesday that permits employers to exclude the amount of forgiveness from a Paycheck Protection Program loan and grants from the pandemic relief programs for shuttered venue operators and restaurants revitalization participants. The agency said the safe harbor provision is necessary so that funds from these relief programs don’t preclude a business from qualifying for the tax ...