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IRS Provides Gross Receipts Safe Harbor

 A safe harbor has been issued that allows employers to exclude three categories of revenue from gross receipts for determining eligibility for the Employee Retention Credit. The action was taken this week by the Internal Revenue Service which issued Revenue Procedure 2021-33 PDF 

The items that can be excluded are the following:                                                                                                                                                                           *The amount of the forgiveness of a Paycheck Protection Program Loan;                                                                                                                  *Shuttered Venue Operators Grants under the Economic Aid to Hard-Hit Small Businesses, Non-Profits, and Venues Act; and                            *Restaurant Revitalization Grants under the American Rescue Plan Act of 2021.

An employer can elect to exclude these amounts to determinie if it is an eligible employer for a calendar quarter for claiming the ERC on its employment tax return. They cannot be excluded for any other tax purpose.

Revenue Procedure 2021-33 requires employers to apply the safe harbor consistently—they must exclude the amounts each calendar quarter in which gross receipts are relevant to determining ERC eligibility They must also apply the safe harbor to all employers treated as a single employer under the aggregation rules.

Employers are not required to apply the safe harbor.

Bob Scott
Bob Scott has provided information to the tax and accounting community since 1991, first as technology editor of Accounting Today, and from 1997 through 2009 as editor of its sister publication, Accounting Technology. He is known throughout the industry for his depth of knowledge and for his high journalistic standards.  Scott has made frequent appearances as a speaker, moderator and panelist and events serving tax and accounting professionals. He  has a strong background in computer journalism as an editor with two former trade publications, Computer+Software News and MIS Week and spent several years with weekly and daily newspapers in Morris County New Jersey prior to that.  A graduate of Indiana University with a degree in journalism, Bob is a native of Madison, Ind
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