Internal Revenue Bulletin 2021-11 (PDF rendition): IRS Notices

Preserve advance releases and the authoritative Internal Revenue Bulletin rendition; directory timestamps are file-publication metadata, not legal effective dates. HTML bulletins begin June 2003; earlier available issues require full PDF parsing. Whole bulletin rendition: numbered items are identified below; other legal material and publisher context remain included. This is not a new standalone advance release.

Bulletin No. 2021–11
March 15, 2021
HIGHLIGHTS
OF THIS ISSUE
These synopses are intended only as aids to the reader in
identifying the subject matter covered. They may not be
relied upon as authoritative interpretations.
EMPLOYMENT TAX
Notice 2021-20, page 922.
Notice 2021-20 provides guidance on the employee reten-
tion credit provided under Section 2301 of the Coronavirus
Aid, Relief, and Economic Security Act, as amended by sec-
tion 206 of the Taxpayer Certainty and Disaster Tax Relief Act
of 2020 (Relief Act), for qualified wages paid after March 12,
2020, and before January 1, 2021. Notice 2021-20 largely
incorporates the concepts previously set forth in the Fre-
quently Asked Questions (FAQs) posted on the IRS website.
Notice 2021-20 also contains guidance related to changes
made by the Relief Act not addressed in the FAQs, including
information for employers that received Paycheck Protection
Program (PPP) loans.
INCOME TAX
Notice 2021-18, page 911.
Notice 2021-18 provides for adjustments to the limitation on
housing expenses for purposes of section 911 of the Inter-
nal Revenue Code for the 2021 tax year. These adjustments
are made on the basis of geographic differences in housing
costs relative to housing costs in the United States. If the
limitation on housing expenses is higher for the 2021 tax
year than the adjusted limitations on housing expenses pro-
vided in Notice 2020-13, qualified taxpayers may apply the
adjusted limitations in this notice for the 2021 tax year to
their 2020 tax year.
Notice 2021-19, page 920.
Resident populations of the 50 states, the District of Colum-
bia, Puerto Rico, and the insular areas for purposes of de-
termining the 2021 calendar year (1) state housing credit
ceiling under section 42(h) of the Code, (2) private activity
bond volume cap under section 146, and (3) private activity
bond volume limit under section 142(k) are reproduced.
Finding Lists begin on page ii.

The IRS Mission
Provide America’s taxpayers top-quality service by helping
them understand and meet their tax responsibilities and en-
force the law with integrity and fairness to all.
Introduction
The Internal Revenue Bulletin is the authoritative instrument
of the Commissioner of Internal Revenue for announcing of-
ficial rulings and procedures of the Internal Revenue Service
and for publishing Treasury Decisions, Executive Orders, Tax
Conventions, legislation, court decisions, and other items of
general interest. It is published weekly.
It is the policy of the Service to publish in the Bulletin all sub-
stantive rulings necessary to promote a uniform application
of the tax laws, including all rulings that supersede, revoke,
modify, or amend any of those previously published in the
Bulletin. All published rulings apply retroactively unless other-
wise indicated. Procedures relating solely to matters of inter-
nal management are not published; however, statements of
internal practices and procedures that affect the rights and
duties of taxpayers are published.
Revenue rulings represent the conclusions of the Service
on the application of the law to the pivotal facts stated in
the revenue ruling. In those based on positions taken in rul-
ings to taxpayers or technical advice to Service field offices,
identifying details and information of a confidential nature are
deleted to prevent unwarranted invasions of privacy and to
comply with statutory requirements.
Rulings and procedures reported in the Bulletin do not have the
force and effect of Treasury Department Regulations, but they
may be used as precedents. Unpublished rulings will not be
relied on, used, or cited as precedents by Service personnel in
the disposition of other cases. In applying published rulings and
procedures, the effect of subsequent legislation, regulations,
court decisions, rulings, and procedures must be considered,
and Service personnel and others concerned are cautioned
against reaching the same conclusions in other cases unless
the facts and circumstances are substantially the same.
The Bulletin is divided into four parts as follows:
Part I.—1986 Code.
This part includes rulings and decisions based on provisions
of the Internal Revenue Code of 1986.
Part II.—Treaties and Tax Legislation.
This part is divided into two subparts as follows: Subpart A,
Tax Conventions and Other Related Items, and Subpart B,
Legislation and Related Committee Reports.
Part III.—Administrative, Procedural, and Miscellaneous.
To the extent practicable, pertinent cross references to these
subjects are contained in the other Parts and Subparts. Also
included in this part are Bank Secrecy Act Administrative
Rulings. Bank Secrecy Act Administrative Rulings are issued
by the Department of the Treasury’s Office of the Assistant
Secretary (Enforcement).
Part IV.—Items of General Interest.
This part includes notices of proposed rulemakings, disbar-
ment and suspension lists, and announcements.
The last Bulletin for each month includes a cumulative index
for the matters published during the preceding months. These
monthly indexes are cumulated on a semiannual basis, and are
published in the last Bulletin of each semiannual period.
The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.
March 15, 2021 Bulletin No. 2021–11

Part III
Determination of Housing
Cost Amounts Eligible for
Exclusion or Deduction for
2021
Notice 2021-18
SECTION 1. PURPOSE
This notice provides adjustments to the
limitation on housing expenses for pur-
poses of section 911 of the Internal Rev-
enue Code for specific locations for 2021.
These adjustments are based on geograph-
ic differences in housing costs relative to
housing costs in the United States.
SECTION 2. BACKGROUND
Section 911 allows a qualified individ-
ual to elect to exclude from gross income
the foreign earned income and to exclude
or deduct the housing cost amount of such
individual.
The term “housing cost amount” is
generally the total of the housing expenses
for the taxable year minus a base housing
amount. See § 911(c)(1). For this purpose,
the base housing amount for the taxable
year is limited to an amount that is tied
to the maximum foreign earned income
exclusion amount, which is $108,700 for
2021. See § 911(c)(1)(B) and (d)(1). Spe-
cifically, the base housing amount is 16
percent of the maximum foreign earned
income exclusion amount (computed on
a daily basis), multiplied by the number
of days in the applicable period that fall
within the taxable year. Assuming that
the entire taxable year of a qualified indi-
vidual is within the applicable period, the
base housing amount for 2021 is $17,392
($108,700 x .16).
Similarly, the housing expense amount
is also limited, based on a percentage of
the maximum foreign earned income ex-
clusion amount. Specifically, the limit on
such housing expenses generally equals
30 percent of the maximum foreign
earned income exclusion amount (com-
puted on a daily basis), multiplied by the
number of days in the applicable peri-
od for which the taxpayer is a qualified
individual. See § 911(c)(2)(A) and (d)
(1). Thus, under this general limitation,
a qualified individual whose entire tax-
able year is within the applicable period
is limited to maximum housing expens-
es of $32,610 ($108,700 x .30) for 2021.
However, section 911(c)(2)(B) authoriz-
es the Secretary to issue regulations or
other guidance to adjust the percentage
under section 911(c)(2)(A)(i) (which de-
termines the limit on housing expenses)
based on geographic differences in hous-
ing costs relative to housing costs in the
United States. Pursuant to this authority,
the Department of the Treasury (Treasury
Department) and the Internal Revenue
Service (IRS) have published annual
notices concerning the limitation on the
section 911 housing cost amounts since
the 2006 taxable year.
For more background on the foreign
housing exclusion, see https://www.irs.
gov/individuals/international-taxpayers/
foreign-housing-exclusion-or-deduction.
SECTION 3. TABLE OF ADJUSTED
HOUSING LIMITATIONS FOR 2021
The following table provides adjusted
limitations on housing expenses (in lieu
of the otherwise applicable limitation of
$32,610) for 2021.
CountryLocation
Limitation on
Housing Expenses
(full year)
Limitation on
Housing Expenses
(daily)
AngolaLuanda84,000230.14
ArgentinaBuenos Aires56,500154.79
AustraliaCanberra38,400105.21
AustraliaPerth33,80092.60
AustraliaSydney74,000202.74
AustriaVienna35,40096.99
Bahamas, TheNassau49,700136.16
BahrainBahrain48,300132.33
BarbadosBarbados37,700103.29
BarbadosBridgetown37,700103.29
BelgiumBrussels44,500121.92
BelgiumGosselies39,700108.77
BelgiumMons39,700108.77
Bulletin No. 2021–11 911 March 15, 2021

CountryLocation
Limitation on
Housing Expenses
(full year)
Limitation on
Housing Expenses
(daily)
BelgiumSHAPE/Chièvres39,700108.77
BermudaBermuda90,000246.58
BrazilRio de Janeiro35,10096.16
BrazilSao Paulo56,600155.07
CanadaCalgary39,700108.77
CanadaMontreal54,200148.49
CanadaOttawa45,800125.48
CanadaQuebec35,70097.81
CanadaToronto56,600155.07
CanadaVancouver49,300135.07
CanadaVictoria40,800111.78
Cayman IslandsGrand Cayman48,000131.51
ChileSantiago35,90098.36
ChinaBeijing74,400203.84
ChinaHong Kong114,300313.15
ChinaShanghai57,001156.17
ColombiaBogota58,700160.82
ColombiaAll cities other than Bogota49,400135.34
Costa RicaSan Jose37,800103.56
Democratic Republic of the
Congo
Kinshasa42,000115.07
DenmarkCopenhagen43,704119.74
Dominican RepublicSanto Domingo45,500124.66
EcuadorQuito38,200104.66
EstoniaTallinn46,600127.67
FranceGarches76,300209.04
FranceLyon42,200115.62
FranceMarseille41,200112.88
FranceMontpellier34,00093.15
FranceParis76,300209.04
FranceSevres76,300209.04
FranceSuresnes
76,300209.04
FranceVersailles76,300209.04
GermanyBabenhausen37,400102.47
GermanyBaumholder37,200101.92
GermanyBerlin45,700125.21
GermanyBirkenfeld37,200101.92
March 15, 2021 912 Bulletin No. 2021–11

Bulletin No. 2021–11 913 March 15, 2021
CountryLocation
Limitation on
Housing Expenses
(full year)
Limitation on
Housing Expenses
(daily)
GermanyBoeblingen44,400121.64
GermanyBonn42,000115.07
GermanyCologne56,200153.97
GermanyDarmstadt37,400102.47
GermanyFrankfurt am Main39,000106.85
GermanyGarmisch-Partenkirchen35,10096.16
GermanyGelnhausen47,200129.32
GermanyGiessen36,00098.63
GermanyGrafenwoehr37,800103.56
GermanyHanau47,200129.32
GermanyHeidelberg34,90095.62
GermanyIdar-Oberstein37,200101.92
GermanyIngolstadt53,500146.58
GermanyKaiserslautern, Landkreis46,400127.12
GermanyKarlsruhe36,10098.90
GermanyKoblenz36,800100.82
GermanyLeimen34,90095.62
GermanyLudwigsburg44,400121.64
GermanyMainz51,100140.00
GermanyMannheim34,90095.62
GermanyMunich53,500146.58
GermanyNellingen44,400121.64
GermanyNeubruecke37,200101.92
GermanyOber Ramstadt37,400102.47
GermanyOberammergau35,10096.16
GermanyPfullendorf36,800100.82
GermanyPirmasens46,400127.12
GermanyRheinau34,90095.62
GermanySchwetzingen34,90095.62
GermanySeckenheim34,90095.62
GermanySembach46,400127.12
GermanyStuttgart44,400121.64
GermanyVilseck37,800103.56
GermanyWahn42,000115.07
GermanyWiesbaden51,100140.00
GermanyZweibrueken46,400127.12

March 15, 2021 914 Bulletin No. 2021–11
CountryLocation
Limitation on
Housing Expenses
(full year)
Limitation on
Housing Expenses
(daily)
GermanyAll cities other than Augsburg,
Babenhausen, Bad Aibling, Bad
Kreuznach, Bad Nauheim, Baum-
holder, Berchtesgaden, Berlin,
Birkenfeld, Boeblingen, Bonn,
Bremen, Bremerhaven, Butzbach,
Cologne, Darmstadt, Delmenhorst,
Duesseldorf, Erlangen, Flensburg,
Frankfurt am Main, Friedberg,
Fuerth, Garlstedt, Garmisch-Parten-
kirchen, Geilenkirchen, Gelnhau-
sen, Germersheim, Giebelstadt,
Giessen, Grafenwoehr, Grefrath,
Greven, Gruenstadt, Hamburg,
Hanau, Handorf, Hannover,
Heidelberg, Heilbronn, Heron-
gen, Idar-Oberstein, Ingolstadt,
Kaiserslautern, Landkreis, Kalkar,
Karlsruhe, Kerpen, Kitzingen, Ko-
blenz, Leimen, Leipzig, Ludwigs-
burg, Mainz, Mannheim, Mayen,
Moenchen-Gladbach, Muenster,
Munich, Nellingen, Neubruecke,
Noervenich, Nuernberg, Ober
Ramstadt, Oberammergau, Os-
terholz-Scharmbeck, Pfullendorf,
Pirmasens, Rheinau, Rheinberg,
Schwabach, Schwetzingen, Secken-
heim, Sembach, Stuttgart, Twist-
eden, Vilseck, Wahn, Wertheim,
Wiesbaden, Worms, Wuerzburg,
Zirndorf, and Zweibrueken
36,800100.82
GhanaAccra36,00098.63
GreeceAthens37,400102.47
GreeceElefsis37,400102.47
GreeceEllinikon37,400102.47
GreeceMt. Parnis37,400102.47
GreeceMt. Pateras37,400102.47
GreeceNea Makri37,400102.47
GreecePiraeus37,400102.47
GreeceTanagra37,400102.47
GuatemalaGuatemala City42,000115.07
GuineaConakry51,300140.55
GuyanaGeorgetown35,00095.89
Holy See, TheHoly See, The50,800139.18
IndiaMumbai67,920186.08
IndiaNew Delhi56,124153.76

Bulletin No. 2021–11 915 March 15, 2021
CountryLocation
Limitation on
Housing Expenses
(full year)
Limitation on
Housing Expenses
(daily)
IndonesiaJakarta37,776103.50
IrelandDublin44,200121.10
IrelandShannon Area35,30096.71
IsraelBeer Sheva61,300167.95
IsraelJerusalem49,000134.25
IsraelTel Aviv50,800139.18
IsraelWest Bank49,000134.25
ItalyAviano40,500110.96
ItalyGenoa41,800114.52
ItalyLa Spezia40,400110.68
ItalyMilan75,900207.95
ItalyNaples52,100142.74
ItalyParma38,600105.75
ItalyRome50,800139.18
ItalyTurin38,000104.11
ItalyVicenza42,400116.16
JamaicaKingston41,200112.88
JapanAtsugi43,200118.36
JapanCamp Zama43,200118.36
JapanChiba-Ken43,200118.36
JapanFussa43,200118.36
JapanGifu74,300203.56
JapanHaneda43,200118.36
JapanIwakuni35,10096.16
JapanKanagawa-Ken43,200118.36
JapanKomaki74,300203.56
JapanMachidi-Shi43,200118.36
JapanMisawa34,50094.52
JapanNagoya74,300203.56
JapanOkinawa Prefecture59,800163.84
JapanOsaka-Kobe90,664248.39
JapanSagamihara43,200118.36
JapanSaitama-Ken43,200118.36
JapanSasebo35,40096.99
JapanTachikawa43,200118.36
JapanTokyo99,700273.15
JapanTokyo-to43,200118.36
JapanYokohama53,100145.48

March 15, 2021 916 Bulletin No. 2021–11
CountryLocation
Limitation on
Housing Expenses
(full year)
Limitation on
Housing Expenses
(daily)
JapanYokosuka56,900155.89
JapanYokota40,700111.51
KazakhstanAlmaty48,000131.51
KoreaCamp Colbern54,200148.49
KoreaCamp Market59,000161.64
KoreaCamp Mercer54,200148.49
KoreaK-1659,000161.64
KoreaKimpo Airfield59,000161.64
KoreaMunsan34,000 93.15
KoreaOsan AB39,400107.95
KoreaPyongtaek42,300115.89
KoreaSeoul59,000161.64
KoreaSuwon59,000161.64
KoreaTaegu36,00098.63
KoreaTongduchon35,20096.44
KoreaUijongbu32,80089.86
KuwaitKuwait City64,400176.44
KuwaitAll cities other than Kuwait City57,700158.08
LuxembourgLuxembourg41,700114.25
MacedoniaSkopje35,40096.99
MalaysiaKuala Lumpur46,200126.58
MalaysiaAll cities other than Kuala Lumpur33,70092.33
MaltaMalta55,100150.96
MexicoMerida37,900103.84
MexicoMexico City47,900131.23
MexicoMonterrey33,20090.96
MexicoAll cities other than Ciudad Juarez,
Cuernavaca, Guadalajara, Her-
mosillo, Matamoros, Mazatlan,
Merida, Metapa, Mexico City,
Monterrey, Nogales, Nuevo Lare-
do, Reynosa, Tapachula, Tijuana,
Tuxtla Gutierrez, and Veracruz
39,400107.95
MozambiqueMaputo39,500108.22
NetherlandsAmsterdam52,900144.93
NetherlandsAruba39,100107.12
NetherlandsBrunssum38,000104.11
NetherlandsEygelshoven38,000104.11
NetherlandsHague, The60,600166.03

Bulletin No. 2021–11 917 March 15, 2021
CountryLocation
Limitation on
Housing Expenses
(full year)
Limitation on
Housing Expenses
(daily)
NetherlandsHeerlen38,000104.11
NetherlandsHoensbroek38,000104.11
NetherlandsHulsberg38,000104.11
NetherlandsKerkrade38,000104.11
NetherlandsLandgraaf38,000104.11
NetherlandsMaastricht38,000104.11
NetherlandsPapendrecht36,500100.00
NetherlandsRotterdam36,500100.00
NetherlandsSchaesburg38,000104.11
NetherlandsSchinnen38,000104.11
NetherlandsSchiphol52,900144.93
NetherlandsYpenburg60,600166.03
NetherlandsAll cities other than Amsterdam,
Aruba, Brunssum, Coevorden,
Eygelshoven, The Hague, Heerlen,
Hoensbroek, Hulsberg, Kerkrade,
Landgraaf, Maastricht, Margraten,
Papendrecht, Rotterdam, Schaes-
burg, Schinnen, Schiphol, and
Ypenburg.
36,00098.63
Netherlands AntillesCuracao45,800125.48
New ZealandAuckland35,70097.81
New ZealandWellington33,80092.60
NigeriaAbuja36,00098.63
NorwayOslo34,10093.42
OmanMuscat41,300113.15
PanamaPanama City39,500108.22
PeruLima39,100107.12
PhilippinesCavite41,400113.42
PhilippinesManila41,400113.42
PolandWarsaw40,900112.05
PortugalAlverca46,500127.40
PortugalLisbon46,500127.40
QatarDoha45,888125.72
RomaniaBucharest41,200112.88
RussiaMoscow108,000295.89
RussiaSaint Petersburg60,000164.38
RussiaSakhalin Island77,500212.33
RussiaVladivostok77,500212.33
RussiaYekaterinburg47,400129.86

March 15, 2021 918 Bulletin No. 2021–11
CountryLocation
Limitation on
Housing Expenses
(full year)
Limitation on
Housing Expenses
(daily)
Saudi ArabiaRiyadh40,000109.59
SingaporeSingapore84,100230.41
SloveniaLjubljana53,300146.03
South AfricaPretoria39,300107.67
SpainBarcelona40,600111.23
SpainMadrid62,000169.86
SpainRota37,800103.56
SpainValencia35,60097.53
SurinameParamaribo33,00090.41
SwitzerlandBern72,900199.73
SwitzerlandGeneva103,800284.38
SwitzerlandZurich39,219107.45
SwitzerlandAll cities other than Bern, Geneva
and Zurich
32,90090.14
TaiwanTaipei46,188126.54
TanzaniaDar Es Salaam44,000120.55
ThailandBangkok59,000161.64
Trinidad and TobagoPort of Spain54,500149.32
UkraineKiev72,000197.26
United Arab EmiratesAbu Dhabi49,687136.13
United Arab EmiratesDubai57,174156.64
United KingdomBasingstoke41,099112.60
United KingdomBath41,000112.33
United KingdomBracknell62,100170.14
United KingdomBristol33,20090.96
United KingdomBrookwood37,300102.19
United KingdomCambridge36,20099.18
United KingdomCaversham73,800202.19
United KingdomCheltenham44,000120.55
United KingdomCroughton38,100104.38
United KingdomFairford35,90098.36
United KingdomFarnborough54,700149.86
United KingdomFelixstowe34,90095.62
United KingdomGibraltar44,616122.24
United KingdomHarrogate39,100107.12
United KingdomHigh Wycombe62,100170.14
United KingdomHuntingdon37,300102.19

Bulletin No. 2021–11 919 March 15, 2021
CountryLocation
Limitation on
Housing Expenses
(full year)
Limitation on
Housing Expenses
(daily)
United KingdomKemble35,90098.36
United KingdomLakenheath48,700133.42
United KingdomLiverpool32,70089.59
United KingdomLondon72,300198.08
United KingdomLoudwater57,400157.26
United KingdomMenwith Hill39,100107.12
United KingdomMildenhall48,700133.42
United KingdomOxfordshire36,600100.27
United KingdomPlymouth36,600100.27
United KingdomPortsmouth36,600100.27
United KingdomReading62,100170.14
United KingdomRochester37,500102.74
United KingdomSamlesbury37,300102.19
United KingdomSouthampton44,200121.10
United KingdomSurrey48,402132.61
United KingdomWaterbeach37,400102.47
United KingdomWiltshire35,30096.71
United KingdomAll cities other than Basingstoke,
Bath, Belfast, Birmingham, Brack-
nell, Bristol, Brookwood, Brough,
Cambridge, Caversham, Chelms-
ford, Cheltenham, Chicksands,
Croughton, Dunstable, Edinburgh,
Edzell, Fairford, Farnborough,
Felixstowe, Ft. Halstead, Gibraltar,
Glenrothes, Greenham Com-
mon, Harrogate, High Wycombe,
Huntingdon, Hythe, Kemble,
Lakenheath, Liverpool, London,
Loudwater, Menwith Hill, Milden-
hall, Nottingham, Oxfordshire,
Plymouth, Portsmouth, Reading,
Rochester, Samlesbury, Southamp-
ton, Surrey, Waterbeach, Welford,
West Byfleet, and Wiltshire.
37,300102.19
VenezuelaCaracas57,000156.16
VietnamHanoi46,800128.22
VietnamHo Chi Minh City42,000115.07

March 15, 2021 920 Bulletin No. 2021–11
SECTION 4. OPTION TO APPLY 2021
ADJUSTED HOUSING LIMITATIONS
TO 2020 TAXABLE YEAR
For some locations, the limitation on
housing expenses provided in Section 3 of
this notice may be higher than the limita-
tion on housing expenses provided in the
“Table of Adjusted Limitations for 2020”
in Notice 2020-13. A qualified individual
incurring housing expenses in such a loca-
tion during 2020 may apply the adjusted
limitation on housing expenses provided
in Section 3 of this notice for 2021 in lieu
of the amounts provided in the “Table of
Adjusted Limitations for 2020” in Notice
2020-13 (and as set forth in the Instruc-
tions to Form 2555, Foreign Earned In-
come, for 2020).
The Treasury Department and the IRS
anticipate that future annual notices pro-
viding adjustments to housing expense
limitations will make a similar option
available to qualified individuals that in-
cur housing expenses in the immediately
preceding year. For example, when adjust-
ed housing expense limitations for 2022
are issued, it is expected that taxpayers
will be permitted to apply those adjusted
limitations to the 2021 taxable year.
SECTION 5. EFFECT ON OTHER
DOCUMENTS
This notice supersedes Notice 2020-
13, 2020-11 I.R.B. 502.
SECTION 6. EFFECTIVE DATE
This notice is effective for taxable years
beginning on or after January 1, 2021. How-
ever, as provided in Section 4, taxpayers
may apply the 2021 adjusted housing limita-
tions contained in Section 3 of this notice to
their taxable year beginning in 2020.
SECTION 7. DRAFTING
INFORMATION
The principal author of this notice is
Kate Y. Hwa of the Office of Associate
Chief Counsel (International). For further
information regarding this notice, contact
Kate Y. Hwa at (202) 317-5001 (not a toll-
free number).
2021 Calendar Year
Resident Population
Figures
Notice 2021-19
This notice advises State and local
housing credit agencies that allocate
low-income housing tax credits under § 42
of the Internal Revenue Code, and States
and other issuers of tax-exempt private
activity bonds under § 141, of the pop-
ulation figures to use in calculating: (1)
the 2021 calendar year population-based
component of the State housing credit
ceiling (Credit Ceiling) under § 42(h)(3)
(C)(ii); (2) the 2021 calendar year volume
cap (Volume Cap) under § 146; and (3) the
2021 volume limit (Volume Limit) under
§ 142(k)(5).
Generally, the population-based com-
ponent of both the Credit Ceiling and
the Volume Cap are determined under
§ 146(j), which requires determining the
population figures for any calendar year
on the basis of the most recent census es-
timate of the resident population of a State
(or issuing authority) released by the U.S.
Census Bureau before the beginning of the
calendar year. Similarly, § 142(k)(5) bases
the Volume Limit on the State population.
Sections 42(h)(3)(H) and 146(d)(2)
require adjusting for inflation the popula-
tion-based component of the Credit Ceil-
ing and the Volume Cap. The Credit Ceil-
ing adjustment for the 2021 calendar year
is in Rev. Proc. 2020-45, 2020-46 I.R.B
1016. Section 3.10 of Rev. Proc. 2020-45
provides that, for calendar year 2021, the
amount for calculating the Credit Ceiling
under § 42(h)(3)(C)(ii) is the greater of
$2.8125 multiplied by the State popula-
tion, or $3,245,625. Further, section 3.21
of Rev. Proc. 2020-45 provides that the
amount for calculating the Volume Cap
under § 146(d)(1) for calendar year 2021
is the greater of $110 multiplied by the
State population, or $324,995,000.
For the 50 states, and the District of
Columbia, the population figures for cal-
culating the Credit Ceiling, the Volume
Cap, and the Volume Limit for the 2021
calendar year are the resident population
estimates released electronically by the
U.S. Census Bureau on December 22,
2020, and described in Press Release
CB20-TPS.104. For Puerto Rico the
population figure for the 2021 calendar
year is the resident population estimate
released electronically by the U.S. Cen-
sus Bureau on December 30, 2019 and
described in Press Release CB19-198.
For American Samoa, Guam, the North-
ern Mariana Islands, and the U.S. Virgin
Islands, the population figures for the
2021 calendar year are the 2020 midyear
population figures in the U.S. Census
Bureau’s International Data Base (IDB).
The last announced update of the IDB
by the U.S. Census Bureau in 2020 was
electronically announced on Decem-
ber 15, 2020, in Press Release CB20-
TPS.96.
For convenience, these figures are re-
printed below.

Alabama 4,921,532
Alaska
Resident Population Figures
731,158
American Samoa 47,392
Arizona 7,421,401
Arkansas 3,030,522
California 39,368,078
Colorado 5,807,719
Connecticut 3,557,006

Bulletin No. 2021–11 921 March 15, 2021
Delaware 986,809
District of Columbia 712,816
Florida 21,733,312
Georgia 10,710,017
Guam 168,489
Hawaii 1,407,006
Idaho 1,826,913
Illinois 12,587,530
Indiana 6,754,953
Iowa 3,163,561
Kansas 2,913,805
Kentucky 4,477,251
Louisiana 4,645,318
Maine 1,350,141
Maryland 6,055,802
Massachusetts 6,893,574
Michigan 9,966,555
Minnesota 5,657,342
Mississippi 2,966,786
Missouri 6,151,548
Montana 1,080,577
Nebraska 1,937,552
Nevada 3,138,259
New Hampshire 1,366,275
New Jersey 8,882,371
New Mexico 2,106,319
New York 19,336,776
North Carolina 10,600,823
North Dakota 765,309
Northern Mariana Islands 51,851
Ohio 11,693,217
Oklahoma 3,980,783
Oregon 4,241,507
Pennsylvania 12,783,254
Puerto Rico 3,193,694
Rhode Island 1,057,125
South Carolina 5,218,040
South Dakota 892,717
Tennessee 6,886,834
Texas 29,360,759
Utah 3,249,879
Vermont 623,347
Virginia 8,590,563
Virgin Islands, U.S. 106,290
Washington 7,693,612
West Virginia 1,784,787
Wisconsin 5,832,655
Wyoming 582,328
The principal authors of this notice are
Michael J. Torruella Costa, Office of the
Associate Chief Counsel (Passthroughs
and Special Industries), and Lewis Bell,
Office of the Associate Chief Counsel
(Financial Institutions and Products). For
further information regarding this notice,
please contact Mr. Torruella Costa at (202)
317-4137 (not a toll-free number).

March 15, 2021 922 Bulletin No. 2021–11
Guidance on the Employee
Retention Credit under
Section 2301 of the
Coronavirus Aid, Relief,
and Economic Security Act
Notice 2021-20
I. PURPOSE
This notice provides guidance on the
employee retention credit provided under
section 2301 of the Coronavirus Aid, Re-
lief, and Economic Security Act (CARES
Act), Pub. L. No. 116-136, 134 Stat. 281
(March 27, 2020), as amended by section
206 of the Taxpayer Certainty and Disaster
Tax Relief Act of 2020 (Relief Act), which
was enacted as Division EE of the Con-
solidated Appropriations Act, 2021, Pub.
L. No. 116-260, 134 Stat. 1182 (December
27, 2020). The guidance provided in this
notice addresses the employee retention
credit as it applies to qualified wages paid
after March 12, 2020, and before January
1, 2021. This notice does not address the
changes made by section 207 of the Re-
lief Act that apply to the employee reten-
tion credit for qualified wages paid after
December 31, 2020. The Department of
the Treasury (Treasury) and the Internal
Revenue Service (IRS) will address the
modifications made by section 207 of the
Relief Act applicable to calendar quarters
in 2021 in future guidance.
II. BACKGROUND
Section 2301 of the CARES Act al-
lows a credit (employee retention credit
or credit) against applicable employment
taxes for eligible employers, including
tax-exempt organizations, that pay quali-
fied wages, including certain health plan
expenses, to some or all employees after
March 12, 2020, and before January 1,
2021. Section 206 of the Relief Act adopts
amendments and technical changes to sec-
tion 2301 of the CARES Act for qualified
wages paid after March 12, 2020, and be-
fore January 1, 2021, primarily relating to
who may claim the credit.
1
Section 207 of
the Relief Act amends section 2301 of the
CARES Act to extend the application of
the employee retention credit to qualified
wages paid after December 31, 2020, and
before July 1, 2021, and to modify the cal-
culation of the credit amount for qualified
wages paid during that time.
2
Following the enactment of the CARES
Act, the IRS posted Frequently Asked Ques-
tions (FAQs) on IRS.gov to aid taxpayers in
calculating and claiming the employee re-
tention credit. As of the publication date of
this notice, the FAQs have not been updated
to reflect the changes made by the Relief
Act. This notice incorporates the informa-
tion provided in the FAQs and addresses ad-
ditional issues, including the amendments
to section 2301 of the CARES Act made by
section 206 of the Relief Act. This notice
also identifies instances in which section
206 of the Relief Act made changes to sec-
tion 2301 of the CARES Act that resulted
in rules that are substantially similar to the
interpretation provided in the FAQs.
The remainder of this Section II pro-
vides a summary of the relevant provi-
sions of section 2301 of the CARES Act,
as amended by section 206 of the Relief
Act, as they apply to qualified wages paid
in 2020. References to section 2301 of
the CARES Act include the amendments
made by section 206 of the Relief Act,
unless otherwise noted. This Section II
also includes an overview of the options
for employers to defer the deposit and
payment of the employer’s share of so-
cial security tax under section 2302 of the
CARES Act and to defer the withholding
and payment of the employee’s share of
social security tax under Notice 2020-65,
as modified by Notice 2021-11, which
may affect the amount that an employer
can request as an advance payment of the
credit. Section III of this notice provides
guidance in Q/A format regarding the ap-
plication of section 2301 of the CARES
Act. Any term defined in this Section II or
within a Q/A in Section III applies to all
Q/As in Section III.
A. Claiming the Employee Retention
Credit and Accessing Funds in
Anticipation of the Credit
An employer that is an eligible em-
ployer as defined in section 2301(c)(2)
of the CARES Act and that, after March
12, 2020, and before January 1, 2021,
pays qualified wages, as defined in sec-
tion 2301(c)(3) of the CARES Act, is
entitled to claim the employee retention
credit against the taxes imposed on em-
ployers by section 3111(a) of the Internal
Revenue Code (Code) (employer’s share
of the Old Age, Survivors, and Disabili-
ty Insurance (social security tax)), after
these taxes are reduced by any credits
claimed under section 3111(e) and (f) of
the Code,
3
sections 7001 and 7003 of the
Families First Coronavirus Response Act
(FFCRA), Pub. L. No. 116-127, 134 Stat.
178 (March 18, 2020),
4
and section 303(d)
1
The amendments made by section 206 of the Relief Act take effect as if included in the provisions of the CARES Act to which they relate.
2
Section 207 of the Relief Act makes substantial changes to the employee retention credit that apply to qualified wages paid during the first and second quarter of 2021. Among other changes,
section 207 of the Relief Act (1) makes the employee retention credit available for eligible employers paying qualified wages that are paid after December 31, 2020, and before July 1, 2021;
(2) increases the maximum credit amount that may be claimed per employee (making it equal to 70 percent of $10,000 of qualified wages paid to an employee per calendar quarter); (3)
expands the category of employers that may be entitled to claim the credit; (4) modifies the gross receipts test; (5) modifies the definition of qualified wages; (6) broadens the denial of double
benefit rule and applies it to sections 41, 45A, 45P, 51, and 1396 of the Code; and (7) changes the eligibility to receive advance payments and limits the amount of the advances.
3
Section 3111(e) of the Code permits qualified tax-exempt organizations that hire qualified veterans to claim a credit against the employer’s share of social security tax imposed under section
3111(a) of the Code. Section 3111(f) of the Code permits a qualified small business to elect to apply part or all of its research credit available under section 41 against the tax imposed under
section 3111(a) of the Code.
4
Under sections 7001 and 7003 of the FFCRA, employers with fewer than 500 employees that provide paid sick and family leave, up to specified limits, to employees unable to work or
telework due to certain circumstances related to COVID-19 may claim tax credits. The FFCRA, as amended by the COVID-related Tax Relief Act of 2020 (COVID Relief Act), provides
employers with fewer than 500 employees (eligible FFCRA employers) refundable tax credits that reimburse them for the cost of providing paid sick and family leave wages to employees
unable to work or telework for reasons related to COVID-19 under the Emergency Paid Sick Leave Act (EPSLA) and the Emergency Family and Medical Leave Expansion Act (Expanded
FMLA), respectively. The credits are allowed against the employer’s share of social security tax imposed under section 3111(a) of the Code, and so much of the taxes imposed on employers
under section 3221(a) of the Code as are attributable to the rate in effect under section 3111(a) of the Code. The FFCRA required eligible FFCRA employers to provide paid leave to such
employees for periods after March 31, 2020, and before January 1, 2021. The COVID Relief Act extended the period for which tax credits are available for employers providing paid sick and
family leave that otherwise would meet the requirements of the FFCRA until March 31, 2021, although the requirement that employers provide the leave expired on December 31, 2020. See
Section 286 of the COVID Relief Act, which was enacted as Subtitle B of Title II of Division N of the Consolidated Appropriations Act, 2021, Pub. L. 116-260, 134 Stat.1182 (Dec. 27, 2020).

Bulletin No. 2021–11 923 March 15, 2021
of the Relief Act.
5
Eligible employers sub-
ject to the Railroad Retirement Tax Act
(RRTA) are entitled to take the employee
retention credit against the taxes imposed
on employers by section 3221(a) of the
Code (Tier 1 tax under the RRTA) that are
attributable to the rate in effect under sec-
tion 3111(a) of the Code, after these taxes
are reduced by any credits allowed under
sections 7001 and 7003 of the FFCRA and
section 303(d) of the Relief Act.
Section 2301(b)(3) of the CARES Act
provides that if the amount of the credit
exceeds the applicable employment tax-
es (reduced by any credits claimed under
section 3111(e) and (f) of the Code, sec-
tions 7001 and 7003 of the FFCRA, or
section 303(d) of the Relief Act) for any
calendar quarter, then the excess is treat-
ed as an overpayment and refunded to the
employer under sections 6402(a) or sec-
tion 6413(b) of the Code.
Eligible employers report their to-
tal qualified wages for purposes of the
employee retention credit and claim the
employee retention credit (including any
refund in excess of the employer portion
of social security tax) on their federal em-
ployment tax returns; for most employers,
this is the quarterly Form 941, Employer’s
Quarterly Federal Tax Return.
6
Section 2301(k) of the CARES Act
instructs the Secretary of the Treasury
(or the Secretary’s delegate) to waive the
penalty under section 6656 of the Code for
failure to deposit the employer share of
social security tax in anticipation of the al-
lowance of the refundable credit under the
CARES Act. In addition, section 2301(l)
(1) and (2) of the CARES Act provides for
the advance payment of the credit (subject
to the limitations of the credit and based
on information the Secretary requires) and
the reconciliation of the advance payment
at the time of filing the employment tax
return.
Notice 2020-22, 2020-17 I.R.B. 664,
provides eligible employers relief from
the failure to deposit penalty imposed by
section 6656 of the Code for an employ-
er’s failure to timely deposit employment
taxes to the extent the amounts not depos-
ited are equal to or less than the amount of
refundable tax credits to which the eligi-
ble employer is entitled under the FFCRA
and the CARES Act.
7
Under the notice, an
eligible employer will not be subject to a
penalty under section 6656 for failing to
deposit employment taxes in a calendar
quarter if (1) the eligible employer paid
qualified wages to its employees in the
calendar quarter prior to the time of the
required deposit, (2) the amount of em-
ployment taxes that the employer does not
timely deposit, reduced by the amount of
employment taxes not deposited in antic-
ipation of the credits claimed under sec-
tions 7001 and 7003 of the FFCRA, is less
than or equal to the amount of the employ-
er’s anticipated employee retention credit
for the calendar quarter as of the time of
the required deposit, and (3) the employer
did not seek payment of an advance credit
by filing Form 7200, Advance Payment of
Employer Credits Due to COVID-19, with
respect to the anticipated credits it relied
upon to reduce its deposits. Accordingly,
in anticipation of receiving the employee
retention credit, eligible employers can
(1) reduce their deposits of federal em-
ployment taxes, including withheld taxes,
that would otherwise be required, up to
the amount of the anticipated credit, and
(2) request an advance of the amount of
the anticipated credit that exceeds the re-
duced federal employment tax deposits by
filing Form 7200. Reductions in deposits
and advance payments are accounted for
on the eligible employer’s employment
tax return.
B. Definition of “Eligible Employer”
The employee retention credit is avail-
able only to employers that are eligible
employers. Section 2301(c)(2)(A) of the
CARES Act defines the term “eligible
employer” as any employer carrying on
a trade or business during calendar year
2020, and, with respect to any calendar
quarter, for which (1) the operation of the
trade or business carried on during calen-
dar year 2020 is fully or partially suspend-
ed due to orders from an appropriate gov-
ernmental authority limiting commerce,
travel, or group meetings (for commercial,
social, religious, or other purposes) due to
COVID-19, or (2) such calendar quarter is
within the period in which the employer
had a significant decline in gross receipts,
as described in section 2301(c)(2)(B) of
the CARES Act.
Section 2301(c)(2)(B)(i) of the CARES
Act provides that the period during which
an employer experiences a significant
decline in gross receipts begins with the
first calendar quarter beginning after De-
cember 31, 2019, for which gross receipts
(within the meaning of section 448(c) of
the Code) for the calendar quarter are less
than 50 percent of gross receipts for the
same calendar quarter in the prior year.
Section 2301(c)(2)(B)(ii) of the CARES
Act provides that the period during which
an employer experiences a significant de-
cline in gross receipts ends with the calen-
dar quarter that follows the first calendar
quarter beginning after a calendar quarter
described in section 2301(c)(2)(B)(i) of
the CARES Act for which gross receipts
of the employer are greater than 80 per-
cent of gross receipts for the same calen-
dar quarter in the prior year.
Section 2301(c)(2)(C)(i) of the CARES
Act provides that in the case of an organi-
zation described in section 501(c) of the
Code and exempt from tax under section
501(a) of the Code (a tax-exempt orga-
nization), sections 2301(c)(2)(A)(i) (re-
lating to the requirement of carrying on a
trade or business) and 2301(c)(2)(A)(ii)(I)
(relating to a full or partial suspension of
the operation of a trade or business due to
a governmental order) apply to all opera-
tions of the organization. Section 2301(c)
(2)(C)(ii) of the CARES Act provides that,
in the case of a tax-exempt organization,
any reference to gross receipts in section
2301 of the CARES Act is treated as a ref-
erence to gross receipts within the mean-
ing of section 6033 of the Code. There-
fore, tax-exempt organizations should
refer to the definition of gross receipts un-
5
Section 303(d) of the Relief Act relates to a separate, unrelated employee retention credit for certain tax-exempt organizations affected by qualified natural disasters. Section 303(d)(3)(C)
(iii) of the Relief Act added a reference to section 303(d) to section 2301(b)(2) of the CARES Act, which impacts the ordering of the credits.
6
Some eligible employers will use other federal employment tax returns, such as the Form 944, Employer’s Annual Federal Tax Return, Form 943, Employer’s Annual Federal Tax Return for
Agricultural Employees, or Form CT-1, Employer’s Annual Railroad Tax Return, to report the amount of total qualified wages paid.
7
Treasury and IRS will address the application of Notice 2020-22 in relation to the employee retention credit available for quarters in 2021 in future guidance.

March 15, 2021 924 Bulletin No. 2021–11
der section 6033 of the Code to determine
whether they experienced a significant de-
cline in gross receipts under section 2301
of the CARES Act.
8
Section 2301(f) of the CARES Act
provides that the employee retention
credit does not apply to the Government
of the United States, the government of
any State or political subdivision thereof,
or any agency or instrumentality of those
governments. Accordingly, these entities
are not eligible employers.
Prior to the Relief Act amendments,
section 2301(j) of the CARES Act provid-
ed that an eligible employer that received
a covered loan under paragraph (36) of
section 7(a) of the Small Business Act (15
U.S.C. 636(a)), as added by section 1102
of the CARES Act (a Paycheck Protection
Program loan or PPP loan) would not be
eligible for the employee retention cred-
it. Section 206 of the Relief Act amended
section 2301 of the CARES Act to permit
an employer that received a PPP loan to
be eligible to claim an employee retention
credit under section 2301 of the CARES
Act by striking section 2301(j) of the
CARES Act, effective retroactive to the
original effective date of the CARES Act.
C. Definition of “Qualified Wages”
Section 2301(a) of the CARES Act
provides that the credit amount is equal to
50 percent of qualified wages with respect
to each employee for each applicable cal-
endar quarter in 2020.
For purposes of determining “quali-
fied wages,” section 2301(c)(5)(A) of the
CARES Act provides that the term “wag-
es” generally means wages as defined in
section 3121(a) of the Code and com-
pensation as defined in section 3231(e)
of the Code. Section 2301(c)(5)(B) of
the CARES Act provides that “wages”
include amounts paid by an eligible em-
ployer to provide and maintain a group
health plan (as defined in section 5000(b)
(1) of the Code), but only to the extent that
the amounts are excluded from the gross
income of employees by reason of sec-
tion 106(a) of the Code. Amounts treated
as wages under section 2301(c)(5)(B) of
the CARES Act are treated as paid with
respect to any employee (and with respect
to any period) to the extent the amounts
are properly allocable to the employee
(and to the period), and, except as oth-
erwise provided by the Secretary of the
Treasury (Secretary), the allocation will
be treated as proper if made on the basis
of being pro rata among periods of cov-
erage. References to “allocable qualified
health plan expenses” or “qualified health
plan expenses” in this notice are to the
health plan expenses described in section
2301(c)(5)(B) of the CARES Act.
9
Section 2301(c)(3)(A) of the CARES
Act provides different definitions of
“qualified wages” depending on the size
of the employer, which is measured by the
average number of full-time employees
(within the meaning of section 4980H of
the Code) employed by the eligible em-
ployer during 2019.
Section 2301(c)(3)(A)(i) of the CARES
Act provides that if an eligible employer
averaged more than 100 employees during
2019 (large eligible employer), qualified
wages are those wages paid by the eligible
employer with respect to which an em-
ployee is not providing services due to cir-
cumstances described in section 2301(c)
(2)(A)(ii)(I) of the CARES Act (relating
to a full or partial suspension of the oper-
ation of a trade or business due to a gov-
ernmental order) or section 2301(c)(2)(A)
(ii)(II) of the CARES Act (relating to a
significant decline in gross receipts). For
large eligible employers, section 2301(c)
(3)(B) of the CARES Act limits qualified
wages that may be taken into account to
the amount that the employee would have
been paid for working an equivalent dura-
tion during the 30 days immediately pre-
ceding the period in which the qualified
wages are paid or incurred.
Section 2301(c)(3)(A)(ii) of the
CARES Act provides that if an eligible
employer averaged 100 or fewer employ-
ees in 2019 (small eligible employer),
qualified wages are those wages paid by
the eligible employer with respect to an
employee during any period described in
section 2301(c)(2)(A)(ii)(I) of the CARES
Act (relating to a calendar quarter for
which the operation of a trade or business
is fully or partially suspended due to a
governmental order) or during a calendar
quarter within the period described in sec-
tion 2301(c)(2)(A)(ii)(II) of the CARES
Act (relating to a significant decline in
gross receipts).
The flush language in section 2301(c)
(3)(A) of the CARES Act provides that
qualified wages do not include any wag-
es taken into account for purposes of the
credits under sections 7001 or 7003 of the
FFCRA.
Section 2301(b)(1) of the CARES Act
limits the amount of qualified wages with
respect to any employee that may be tak-
en into account under section 2301(a) of
the CARES Act to $10,000 for all calen-
dar quarters in 2020. Therefore, the max-
imum credit amount with respect to each
employee for all four calendar quarters in
2020 is $5,000.
D. Election Not to Take Certain Wages
into Account and Coordination with
PPP Loan
Section 2301(g)(1) of the CARES Act
provides that section 2301 of the CARES
Act does not apply to qualified wages paid
by an eligible employer to the extent the
employer elects not to take them into ac-
count for purposes of section 2301 of the
CARES Act (at such time and in such
manner as the Secretary may prescribe).
Section 2301(g)(2) of the CARES Act
provides that the Secretary, in consulta-
tion with the Administrator of the Small
Business Administration, will issue guid-
ance providing that payroll costs paid
during the covered period for a PPP loan
will not fail to be treated as qualified wag-
es under section 2301 of the CARES Act,
if an employer makes an election under
8
Prior to the changes made by the Relief Act, section 448(c) of the Code applied to determine gross receipts of tax-exempt organizations under section 2301 of the CARES Act. Although
the Relief Act changed the definition of gross receipts applicable to tax-exempt organizations to reference the definition under section 6033 of the Code, the result under section 2301 of the
CARES Act, as revised by the Relief Act, is substantially the same as the interpretation of “gross receipts” applicable to tax-exempt organizations in the FAQs posted on IRS.gov in 2020.
9
The Relief Act removed the term “qualified health plan expenses” from the definition of qualified wages under section 2301(c)(3) of the CARES Act and included health plan expenses as
part of the definition of wages in section 2301(c)(5) of the CARES Act. The result under section 2301 of the CARES Act, as revised by the Relief Act, is substantially the same as the inter-
pretation provided in the FAQs posted on IRS.gov in 2020.

Bulletin No. 2021–11 925 March 15, 2021
section 2301(g)(1) of the CARES Act, to
the extent that the PPP loan of the eligible
employer is not forgiven by reason of a
decision under section 7A(g) of the Small
Business Act.
10
Related to section 2301(g)(2) of the
CARES Act, section 206(e)(2) of the Re-
lief Act provides a special rule for em-
ployers that filed an employment tax re-
turn before December 27, 2020. Section
206(e)(2)(A) of the Relief Act provides
that those employers may elect to treat any
“applicable amount” as an amount paid in
the fourth calendar quarter of 2020. Sec-
tion 206(e)(2)(B) of the Relief Act defines
the “applicable amount,” in part, as the
amount of wages that are permitted to be
treated as qualified wages under guidance
issued pursuant to section 2301(g)(2) of
the CARES Act (relating to the decision
not to forgive a loan under section 7A(g)
of the Small Business Act), that were paid
in the first, second, or third calendar quar-
ter of 2020, and that were not taken into
account by the taxpayer in calculating the
employee retention credit for such calen-
dar quarter (special fourth quarter rule).
11
E. Aggregation Rules
Section 2301(d) of the CARES Act
provides that all persons treated as a sin-
gle employer under section 52(a) or (b) of
the Code, or section 414(m) or (o) of the
Code, will be treated as a single employ-
er for purposes of the employee retention
credit. While this notice describes the ag-
gregation rules under sections 52(a) and
(b) and 414(m) and (o) in general terms, it
does not provide separate guidance on the
substantive requirements of those aggre-
gation rules or otherwise interpret those
rules.
F. Other Rules Related to the
Employee Retention Credit
Section 2301(e) of the CARES Act pro-
vides that rules similar to section 280C(a)
of the Code apply for purposes of the em-
ployee retention credit. Section 280C(a) of
the Code generally disallows a deduction
for the portion of wages or salaries paid or
incurred equal to the sum of certain credits
determined for the taxable year. According-
ly, a similar deduction disallowance applies
under section 2301(e) of the CARES Act
with regard to the employee retention cred-
it, such that an employer’s deduction for
qualified wages, including qualified health
plan expenses, is reduced by the amount of
the employee retention credit.
Section 2301(e) of the CARES Act also
provides that rules similar to the rules of
section 51(i)(1) of the Code (relating to the
work opportunity credit) apply for purpos-
es of the employee retention credit. Section
51(i)(1) provides that wages paid to “re-
lated individuals” (within the meaning of
section 51(i)(1)) may not be taken into ac-
count for determining the credit under sec-
tion 51(a) of the Code. Accordingly, wages
paid to related individuals may not be taken
into account for determining qualified wag-
es for the employee retention credit. Simi-
larly, section 2301(h)(1) of the CARES Act
provides that an employee will not be in-
cluded for purposes of computing the em-
ployee retention credit for any period that
an employer is allowed a work opportunity
credit under section 51 with respect to that
employee for that period.
Section 2301(h)(2) of the CARES Act
states that any wages taken into account in
determining the employee retention credit
will not be taken into account for purpos-
es of determining the credit allowed under
section 45S of the Code (relating to paid
and family medical leave).
Finally, section 2301(h)(3) of the
CARES Act provides that the employee re-
tention credit is treated as a credit described
in section 3511(d)(2) of the Code.
12
G. Regulations and Guidance
Section 2301(l) of the CARES Act
requires the Secretary to issue forms, in-
structions, regulations, and guidance, as
necessary, to allow for the advance pay-
ment of the credit, provide for reconcili-
ation of the advance payment at the time
of filing the employment tax return, and to
apply the credit to third-party payers. Sec-
tion 2301(l) of the CARES Act also gives
the Secretary authority to issue guidance
on the application of the definition of a
“significant decline in gross receipts” in
the case of any employer that was not car-
rying on a trade or business for all or part
of the same calendar quarter in the prior
year and to prevent avoidance of the pur-
poses of the limitations applicable to the
employee retention credit.
H. Deferral Under Section 2302 of the
CARES Act
Section 2302 of the CARES Act pro-
vides that employers may defer the depos-
it and payment of the employer’s share of
social security tax and the portion of Tier
1 tax under the RRTA that is equivalent
to the employer’s share of social securi-
ty tax for the period of March 27, 2020,
through December 31, 2020. Section 2302
does not impact an employer’s eligibili-
ty to claim the employee retention cred-
it. However, because an employer may
defer deposits under section 2302 before
reducing deposits in anticipation of claim-
ing the credit, the deferral may affect the
amount that an employer may request as
an advance of the credit.
I. Deferral Under Notice 2020-65 as
Modified by Notice 2021-11
Notice 2020-65, 2020-38 I.R.B. 567,
as modified by Notice 2021-11, 2021-6
I.R.B. 827, permits employers to postpone
the withholding and payment of the em-
ployee’s share of social security tax or the
employee’s share of Tier 1 tax under the
RRTA that is equivalent to the employee’s
share of social security tax with respect
to applicable wages (as defined in Notice
10
Section 7A(g) of the Small Business Act (15 U.S.C. 636(a)) sets forth the timing rule for lenders that receive an application for loan forgiveness from eligible recipients that received a
Paycheck Protection Program loan. Specifically, section 7A(g) of the Small Business Act requires lenders to provide a decision regarding forgiveness no later than 60 days after the date
on which the lender receives an application of loan forgiveness from an eligible recipient. The Relief Act added section 2301(g)(2) to the CARES Act when it struck section 2301(j) of the
CARES Act, discussed above.
11
The special fourth quarter rule also applies to the applicable amount described in section 2301(c)(5)(B) of the CARES Act, which is qualified health plan expenses.
12
Section 3511 provides rules for Certified Professional Employer Organizations (CPEOs) and their customers with regard to employment taxes on wages paid by the CPEO to the customer’s
employees. Section 3511(d) provides the following rules for certain credits specified in section 3511(d)(2): (1) credits with respect to a customer’s work site employee apply to the customer,
not the CPEO; (2) the customer, not the CPEO, takes into account wages and employment taxes paid by the CPEO with respect to the work site employee and for which the CPEO receives
payment from the customer; and (3) the CPEO must furnish the customer and the Secretary with any information necessary for the customer to claim the credits.

March 15, 2021 926 Bulletin No. 2021–11
2020-65) paid to an employee on a pay
date during the period beginning on Sep-
tember 1, 2020, and ending on December
31, 2020. Deferral under Notice 2020-65,
as modified by Notice 2021-11, during the
third or fourth quarter of 2020 does not
impact an employer’s eligibility to claim
the employee retention credit. However,
because an employer may defer deposits
of the employee’s share of social security
tax before reducing deposits in anticipa-
tion of claiming the credit, the deferral
may affect the amount that an employer
may request as an advance of the credit.
III. GUIDANCE
This Section III provides guidance in
Q/A format on the following topics:
A. Eligible Employers
B. Aggregation Rules
C. Governmental Orders
D. Full or Partial Suspension of Trade or
Business Operations
E. Significant Decline in Gross Receipts
F. Maximum Amount of Employer’s
Employee Retention Credit
G. Qualified Wages
H. Allocable Qualified Health Plan Ex-
penses
I. Interaction with Paycheck Protection
Program (PPP) Loans
J. Claiming the Employee Retention
Credit
K. Special Issues for Employees: In-
come and Deduction
L. Special Issues for Employers: Income
and Deduction
M. Special Issues for Employers: Use of
Third-Party Payers
N. Substantiation Requirements
A. Eligible Employers
Question 1: What is a “trade or busi-
ness” for purposes of the employee reten-
tion credit?
Answer 1: For purposes of the employ-
ee retention credit, “trade or business” has
the same meaning as when used in sec-
tion 162 of the Code other than the trade
or business of performing services as an
employee. Under section 162, an activity
does not qualify as a trade or business un-
less its primary purpose is to make a prof-
it and it is carried on with regularity and
continuity. The facts and circumstances of
each case determine whether an activity is
a trade or business. A taxpayer does not
necessarily need to make a profit in any
particular year in order to be in a trade or
business as long as a good faith profit mo-
tive is present.
For purposes of the employee reten-
tion credit, a tax-exempt organization de-
scribed in section 501(c) of the Code that
is exempt from tax under section 501(a)
of the Code is deemed to be engaged in a
“trade or business” with respect to all op-
erations of the organization.
Question 2: How does an organization
determine if it is considered an “instru-
mentality” of the Federal government, or
of a State or local government, for purpos-
es of the employee retention credit?
Answer 2: In general, for employment
tax purposes, the IRS considers six factors
in determining whether an organization is
a government instrumentality. The six fac-
tors that are used to determine whether an
organization is an instrumentality are:
• whether the organization is used for a
governmental purpose and performs a
governmental function;
• whether performance of the organiza-
tion’s function is on behalf of one or
more States or political subdivisions;
• whether there are any private interests
involved, or whether the States or po-
litical subdivisions involved have the
powers and interests of an owner;
• whether control and supervision of
the organization is vested in a public
authority or authorities;
• if express or implied statutory or
other authority is necessary for the
creation and/or use of such an instru-
mentality, and whether such authority
exists; and
• the degree of financial autonomy and
the source of its operating expenses.
See Rev. Rul. 57-128, 1957-1 C.B. 311.
No one factor is determinative; instru-
mentality status is based on all the facts
and circumstances. These same factors
apply to identify an instrumentality of the
Federal government, or of a State or local
government, for purposes of the employee
retention credit.
Question 3: Are tribal governments
and tribal entities eligible for the employ-
ee retention credit?
Answer 3: Yes. Any tribal government
or tribal entity that operates a trade or
business may be an eligible employer for
purposes of the employee retention credit
if it otherwise satisfies the eligibility re-
quirements to claim the credit.
As a general rule, whether activities
constitute a trade or business for purpos-
es of the employee retention credit is de-
termined under section 162 of the Code.
However, because tribal governments are
not subject to income tax under the Code
and, therefore, are generally not otherwise
required to determine whether an activity
of the tribe constitutes the carrying on of
a trade or business under section 162, the
Treasury Department and IRS have con-
cluded that the section 162 standards are
not the appropriate bases for determining
whether a tribal government is carrying on
a trade or business for purposes of the em-
ployee retention credit. Instead, solely for
purposes of the employee retention credit,
a tribal government is treated as carrying
on trade or business activities, and all ac-
tivities conducted by the tribal govern-
ment will be considered part of such trade
or business activities, without the need for
further analysis of whether those activities
meet a particular standard for identifying
trade or business operations. In addition,
solely for purposes of the employee reten-
tion credit, any entity that a tribal govern-
ment reasonably believes shares the same
tax status as the tribal government (tribal
entity employer) may also consider all of
its activities as trade or business activities.
Any entity other than a tribal government
or a tribal entity employer must determine
whether its activities constitute carrying
on a trade or business under section 162
for purposes of determining eligibility for
the employee retention credit.
Question 4: Are employers in U.S. Ter-
ritories eligible for the employee retention
credit?
Answer 4: Yes. If an employer in a U.S.
Territory otherwise qualifies for the em-
ployee retention credit then the employ-
er is entitled to claim the credit. Section
2301(c)(5)(A) of the CARES Act provides
that qualified wages are, in general, wages
as defined in section 3121(a) of the Code
for purposes of the Federal Insurance
Contributions Act (FICA) tax. Payments
of wages by employers in U.S. Territories
are wages within the meaning of section
3121(a). Accordingly, eligible employers
include employers in the U.S. Territories

Bulletin No. 2021–11 927 March 15, 2021
that pay qualified wages and otherwise
meet the requirements for the credit.
Question 5: Are self-employed indi-
viduals eligible for the employee retention
credit?
Answer 5: Self-employed individuals
are not eligible for the employee retention
credit with respect to their own self-em-
ployment earnings. However, a self-em-
ployed individual who employs other
individuals in the self-employed individ-
ual’s trade or business and who otherwise
meets the requirements to be an eligible
employer may be eligible for the employ-
ee retention credit with respect to quali-
fied wages the self-employed individual
pays to the employees.
Question 6: Are household employers
eligible for the employee retention credit?
Answer 6: No. Household employers
are not considered to operate a trade or
business and, therefore, are not eligible
for the employee retention credit with re-
spect to their household employees. How-
ever, household employers who are also
employers operating a trade or business
and who generally report employment
taxes attributable to their household em-
ployees on the same federal employment
tax return used to report the employment
taxes attributable to the employees of the
trade or business, may be eligible for the
employee retention credit, but only with
respect to the trade or business employees
and their qualified wages paid with re-
spect to the trade or business.
B. Aggregation Rules
Question 7: What is the general impact
of the aggregation rules that treat certain
entities as a single employer?
Answer 7: All entities that are mem-
bers of a controlled group of corporations
or trades or businesses under common
control under sections 52(a) or (b) of the
Code, members of an affiliated service
group under section 414(m) of the Code,
or otherwise aggregated under section
414(o) of the Code are treated as a sin-
gle employer for purposes of applying
the employee retention credit. As a result,
employers required to be aggregated are
treated as a single employer for purposes
of the following rules applicable to the
employee retention credit:
• Determining whether the employer
has a trade or business operation that
was fully or partially suspended due
to orders related to COVID-19 from
an appropriate governmental author-
ity;
• Determining whether the employer
experiences a significant decline in
gross receipts;
• Determining whether the employer
averaged more than 100 full-time em-
ployees; and
• Determining the maximum credit
amount per employee.
The aggregation rules under section
52(a) and (b) generally apply to deter-
mine which entities are treated as a single
employer for purposes of the tax credits
available to an employer under section 51
of the Code, as well as for other Code pro-
visions.
Under section 52(a), corporate tax-
payers that are members of a controlled
group of corporations are treated as a
single employer. A controlled group of
corporations may be either a parent-sub-
sidiary controlled group, a brother-sister
controlled group, or a combined group of
corporations.
13
The section 52(b) aggrega-
tion rules apply to partnerships, trusts, es-
tates, corporations, or sole proprietorships
in trades or businesses under common
control. Under this rule, entities are treat-
ed as a single employer if they are under
common control applying rules similar
to the parent-subsidiary or brother-sister
controlled group rules or the rules for a
combined group of corporations.
Section 414(m)(1) provides that em-
ployees of members in an affiliated ser-
vice group under section 414(m)(2) and
(5) are treated as employed by a single
employer for purposes of employee ben-
efit requirements listed in section 414(m)
(4).
14
In addition, section 414(o) general-
ly provides that the Secretary shall pre-
scribe regulations necessary to prevent
avoidance of any of the employee bene-
fit requirements listed in section 414(m)
(4) through the use of separate organiza-
tions or other arrangements. Many Code
provisions, particularly those addressing
employee benefits, apply the aggregation
rules of section 414(m) and (o). For exam-
ple, section 414(t) generally provides that
the aggregation rules in section 414(m)
and (o) apply to various Code provisions
listed in section 414(t)(2).
Question 8: How is the employee re-
tention credit allocated to an eligible em-
ployer that is a member of an aggregated
group?
Answer 8: The amount of the employee
retention credit with respect to a member
of the aggregated group is based on the
member’s proportionate share of the qual-
ified wages giving rise to the credit for
each calendar quarter (or other prescribed
period for which a tax return is required to
be filed) for which the credit is claimed.
Question 9: How do the aggregation
rules apply to tribes and tribal entities?
Answer 9: In determining eligibility for
the employee retention credit, all employ-
ers must apply the aggregation rules under
section 52(a) and (b) and section 414(m)
and (o) of the Code. For purposes of the
employee retention credit, tribal govern-
ments and tribal entity employers (as de-
fined in Q/A–3) should use a reasonable,
good faith interpretation in determining
how the aggregation rules apply.
C. Governmental Orders
Question 10: What “orders from an
appropriate governmental authority” may
be taken into account by an employer for
13
A parent-subsidiary controlled group of corporations is one or more chains of corporations where the common parent corporation owns more than 50 percent of the total combined voting
power of all classes of stock entitled to vote, or more than 50 percent of the value of all classes of stock of each corporation. A brother-sister controlled group of corporations is two or more
corporations where (1) five or fewer persons who are individuals, estates, or trusts own at least 80 percent of the total combined voting power of all classes of stock entitled to vote, or the
total value of shares of all classes of stock of each corporation; and (2) the same five or fewer persons, taking into account ownership only to the extent that it is identical with respect to each
corporation, own more than 50 percent of the total voting power of all classes of stock entitled to vote, or total value of shares of all classes of stock of each corporation. A combined group of
corporations is three or more corporations, each of which is a member of either a parent-subsidiary or a brother-sister controlled group, and at least one of which is both the common parent
of a parent-subsidiary controlled group and also a member of a brother-sister controlled group. See Treas. Reg. § 1.52-1.
14
There are three types of affiliated service groups described in section 414(m). The first and second types of affiliated service groups are described under section 414(m)(2) and require a
combination of common ownership and performance of services among certain organizations. The third type of affiliated service group is described under section 414(m)(5), requires no
common ownership, and aggregates employers based on the performance of management functions by one organization for another organization (and related organizations).

March 15, 2021 928 Bulletin No. 2021–11
purposes of determining eligibility for the
employee retention credit?
Answer 10: Orders, proclamations,
or decrees from the Federal government
or any State or local government may
be taken into account by an employer as
“orders from an appropriate governmen-
tal authority” only if they limit “com-
merce, travel, or group meetings (for
commercial, social, religious, or other
purposes) due to the coronavirus dis-
ease 2019 (COVID-19)” and relate to the
suspension of an employer’s operation
of its trade or business. Orders that are
not from the Federal government must
be from a State or local government that
has jurisdiction over the employer’s op-
erations. These orders are referred to as
“governmental orders.” Whether orders,
proclamations or decrees are governmen-
tal orders is determined without regard to
the level of enforcement of the govern-
mental order.
Statements from a governmental of-
ficial, including comments made during
press conferences or in interviews with
the media, do not rise to the level of a
governmental order for purposes of the
employee retention credit. Additionally,
the declaration of a state of emergency
by a governmental authority is not suffi-
cient to rise to the level of a governmen-
tal order if it does not limit commerce,
travel, or group meetings in any manner.
Further, such a declaration that limits
commerce, travel, or group meetings, but
does so in a manner that does not relate
to the suspension of an employer’s op-
eration of its trade or business does not
rise to the level of a governmental order
for purposes of the employer’s determi-
nation of its eligibility for the employee
retention credit.
Governmental orders include:
• An order from the city’s mayor stat-
ing that all non-essential businesses
must close for a specified period;
• A State’s emergency proclamation
that residents must shelter in place
for a specified period, other than resi-
dents who are employed by an essen-
tial business and who may travel to
and work at the workplace location;
• An order from a local official impos-
ing a curfew on residents that impacts
the operating hours of a trade or busi-
ness for a specified period;
• An order from a local health depart-
ment mandating a workplace closure
for cleaning and disinfecting.
Whether the operations of a trade or busi-
ness are considered essential or non-es-
sential will often vary from jurisdiction
to jurisdiction. An employer should deter-
mine whether it is operating an essential
or non-essential business by referring to
the governmental order affecting the em-
ployer’s operation of its trade or business.
Example 1: Governor of State Y issues an order
that all non-essential businesses must close from
March 20, 2020, until April 30, 2020. The order
provides a list of non-essential businesses, including
gyms, spas, nightclubs, barber shops, hair salons, tat-
too parlors, physical therapy offices, waxing salons,
fitness centers, bowling alleys, arcades, racetracks,
indoor children’s play areas, theaters, chiropractors,
planetariums, museums, and performing arts cen-
ters. The governor’s order is a governmental order
limiting the operations of non-essential businesses;
therefore, employers with non-essential businesses
to which the governmental order applies may be
considered eligible employers for purposes of the
employee retention credit.
Example 2: Mayor of City Y holds a press con-
ference encouraging residents to practice social
distancing to prevent the spread of COVID-19. The
statement during the press conference is not an or-
der limiting commerce, travel, or group meetings.
Accordingly, the mayor’s statement would not be a
governmental order for purposes of the employee
retention credit.
Example 3: A restaurant is ordered by a local
health department to close due to a health code vi-
olation. Since the order is unrelated to COVID-19,
it would not be considered a governmental order for
purposes of the employee retention credit.
D. Full or Partial Suspension of Trade
or Business Operations
Question 11: If a governmental order
requires non-essential businesses to sus-
pend operations but allows essential busi-
nesses to continue operations, is an essen-
tial business considered to have a full or
partial suspension of operations due to a
governmental order?
Answer 11: An employer that operates
an essential business is not considered to
have a full or partial suspension of oper-
ations if the governmental order allows
all of the employer’s operations to remain
open. However, an employer that operates
an essential business may be considered to
have a partial suspension of operations if,
under the facts and circumstances, more
than a nominal portion of its business op-
erations are suspended by a governmen-
tal order. For example, an employer that
maintains both essential and non-essen-
tial business operations, each of which
are more than nominal portions of the
business operations, may be considered
to have a partial suspension of its opera-
tions if a governmental order restricts the
operations of the non-essential portion of
the business, even if the essential portion
of the business is unaffected. In addition,
an essential business that is permitted to
continue its operations may, nonetheless,
be considered to have a partial suspension
of its operations if a governmental order
requires the business to close for a period
of time during normal working hours.
Solely for purposes of this employee
retention credit, a portion of an employ-
er’s business operations will be deemed
to constitute more than a nominal portion
of its business operations if either (i) the
gross receipts from that portion of the
business operations is not less than 10
percent of the total gross receipts (both
determined using the gross receipts of the
same calendar quarter in 2019), or (ii) the
hours of service performed by employ-
ees in that portion of the business is not
less than 10 percent of the total number
of hours of service performed by all em-
ployees in the employer’s business (both
determined using the number of hours of
service performed by employees in the
same calendar quarter in 2019).
Question 12: If a governmental order
causes the suppliers to a business to sus-
pend their operations, is the business con-
sidered to have a suspension of operations
due to a governmental order?
Answer 12: An employer may be con-
sidered to have a full or partial suspension
of operations due to a governmental order
if, under the facts and circumstances, the
business’s suppliers are unable to make
deliveries of critical goods or materials
due to a governmental order that causes
the supplier to suspend its operations. If
the facts and circumstances indicate that
the business’s operations are fully or par-
tially suspended as a result of the inability
to obtain critical goods or materials from
its suppliers because they were required
to suspend operations, then the business
would be considered an eligible employ-
er for calendar quarters during which its
operations are fully or partially suspended
and may be eligible to receive the employ-
ee retention credit.

Bulletin No. 2021–11 929 March 15, 2021
Example: Employer A operates an auto parts
manufacturing business. Employer A’s supplier of
raw materials is required to fully suspend its oper-
ations due to a governmental order. Employer A is
unable to procure these raw materials from an alter-
nate supplier. As a consequence of the suspension
of Employer A’s supplier, Employer A is not able to
perform its operations for a period of time. Under
these facts and circumstances, Employer A would be
considered an eligible employer during this period
because its operations have been suspended due to
the governmental order that suspended operations of
its supplier.
Question 13: If a governmental order
causes the customers of a business to stay
at home, or otherwise causes a reduction
in demand for its products or services,
and the business responds to the lack of
demand by suspending some or all of its
operations, is the business considered to
have a suspension of operations due to a
governmental order?
Answer 13: No. An employer that sus-
pends some or all of its operations because
its customers are subject to a government
order requiring them to stay at home or
otherwise causing a reduction in demand
for its products or services is not consid-
ered to have a full or partial suspension of
its operations due to a governmental order.
If an employer’s operations are not sus-
pended due to a governmental order but
the employer experiences a reduction in
demand, the employer may be considered
an eligible employer if it experiences a
significant decline in gross receipts.
Example: Employer B, an automobile repair
service business, is an essential business and is not
required to close its locations or suspend its opera-
tions. Due to a governmental order that limits travel
and requires members of the community to stay at
home except for certain essential travel, such as go-
ing to the grocery store, Employer B’s business has
declined significantly. Employer B suspends its op-
erations due to the lack of demand. Employer B is
not considered to have a full or partial suspension of
operations due to a governmental order.
Question 14: If an employer voluntari-
ly suspends operation of a trade or busi-
ness or voluntarily reduces hours due to
COVID-19, but the suspension or reduc-
tion in hours is not due to a governmen-
tal order, may the employer qualify as an
eligible employer solely on the basis of
the voluntary suspension or reduction in
hours?
Answer 14: No. An employer that
voluntarily suspends operation of a trade
or business or voluntarily reduces hours
due to COVID-19 is not eligible for the
employee retention credit on the basis of
a full or partial suspension of its opera-
tions.
Question 15: If a governmental order
requires an employer to close its work-
place, but the employer is able to continue
operations comparable to its operations
prior to the closure by requiring employ-
ees to telework, is the employer consid-
ered to have a suspension of operations?
Answer 15: No. If an employer’s work-
place is closed by a governmental order,
but the employer is able to continue opera-
tions comparable to its operations prior to
the closure, including by requiring its em-
ployees to telework, the employer’s oper-
ations are not considered to have been ful-
ly or partially suspended as a consequence
of a governmental order.
However, if the closure of the work-
place causes the employer to suspend
business operations for certain purposes,
but not others, it may be considered to
have a partial suspension of operations
due to the governmental order.
Example 1: Employer C, a software develop-
ment company, maintains an office in a city where
the mayor has ordered that only essential businesses
may operate. Employer C’s business is not essential
under the mayor’s order, and therefore Employer C
is required to close its office. Prior to the governmen-
tal order, all employees at the company teleworked
once or twice per week, and business meetings were
held at various locations. Following the governmen-
tal order, the company ordered mandatory telework
for all employees and limited client meetings to tele-
phone or video conferences. Employer C’s business
operations are not considered to be fully or partially
suspended due to the governmental order because
the employer is able to continue its business opera-
tions in a comparable manner.
Example 2: Employer D operates a physical
therapy facility in a city where the mayor has or-
dered that only essential businesses may operate.
Employer D’s business is not considered essential
under the mayor’s order, and therefore Employer D
is required to close its workplace. Prior to the gov-
ernmental order, none of Employer D’s employees
provided services through telework and all appoint-
ments, administration, and other duties were carried
out at Employer D’s workplace. Following the gov-
ernmental order, Employer D moves to an online
format and is able to serve some clients remotely,
but employees cannot access specific equipment
or tools that they typically use in therapy and not
all clients can be served remotely. Employer D’s
business operations are considered to be partially
suspended due to the governmental order because
Employer D’s workplace, including access to phys-
ical therapy equipment, is central to its operations,
and the business operations cannot continue in a
comparable manner.
Example 3: Employer E, a scientific research
company with facilities in a state in which the gov-
ernor has ordered that only essential businesses may
operate, conducts research in a laboratory setting and
through the use of computer modeling. Employer E’s
business is not essential under the governor’s order,
and therefore Employer E is required to close its
workplace. Prior to the governmental order, Employ-
er E’s laboratory-based research operations could
not be conducted remotely (other than certain relat-
ed administrative tasks) and employees involved in
laboratory-based research worked on-site. Employer
E’s computer modeling research operations could be
conducted remotely, and employees who engaged
in this portion of the business often teleworked.
Following the governmental order, the employees
engaged in the laboratory-based research cannot per-
form their work while the facility is closed and are
limited to performing administrative tasks during the
closure. In contrast, all employees engaged in com-
puter modeling research are directed to telework, and
those business operations are able to continue in a
comparable manner. Employer E’s business opera-
tions are considered to be partially suspended due to
the governmental order because Employer E’s lab-
oratory-based research business operations cannot
continue in a comparable manner.
Question 16: What factors should be
considered in determining if an employer
is able to continue operations comparable
to its operations prior to closure such that
the employer’s operations are not consid-
ered to have been fully or partially sus-
pended due to a governmental order?
Answer 16: The following factors
should be considered in determining if an
employer is able to continue comparable
operations, although additional factors
may be considered as well if relevant:
(1) Employer’s telework capabilities.
Determine whether an employer has ade-
quate support (IT and otherwise) such that
operations can continue via work from an-
other location.
(2) Portability of employees’ work. De-
termine the amount of portable work, or
work otherwise adaptable to be performed
from a remote location, within an employ-
er’s trade or business operations.
(3) Need for presence in employee’s
physical work space. Evaluate the role that
the employer’s physical work space plays
in an employer’s trade or business (may
be critical and necessary, beneficial but
not necessary, or merely convenient). If
the employer’s physical work space is so
critical to its trade or business operations
that tasks central to the trade or business’s
operations are unable to be performed
remotely, then this factor alone indicates
that the employer is not able to continue
comparable operations. Examples of work
space that is critical include laboratories
or manufacturing involving special equip-

March 15, 2021 930 Bulletin No. 2021–11
ment or materials that cannot be accessed
or operated remotely.
(4) Transitioning to telework opera-
tions. If an employer can conduct com-
parable operations via telework, but the
employer’s operations did not previously
allow for telework, or allowed for only
minimal telework, then some adjustment
period is expected, and, generally, the
employer’s operations are not consid-
ered partially suspended during that pe-
riod. However, if an employer incurs a
significant delay (for example, beyond 2
weeks) in moving operations to compara-
ble telework (for example, implementing
telework policies or providing employees
with equipment to telework), then the em-
ployer’s trade or business operations may
be deemed subject to a partial suspension
during that transition period.
Question 17: If a governmental order
requires an employer to close its work-
place for certain purposes, but the work-
place may remain operational for other
limited purposes, is the employer consid-
ered to have a suspension of operations
due to the governmental order?
Answer 17: If an employer’s work-
place is closed due to a governmental or-
der for certain purposes, but the employ-
er’s workplace may remain open for other
limited purposes, the employer’s opera-
tions would be considered to be partially
suspended if, under the facts and circum-
stances, the operations that are closed are
more than a nominal portion of its busi-
ness operations and cannot be performed
remotely in a comparable manner. If all,
or all but a nominal portion, of an employ-
er’s business operations may continue, but
the operations are subject to modification
due to a governmental order (for example,
to satisfy distancing requirements), such a
modification of operations is considered
to be a partial suspension of business op-
erations due to a governmental order if
the modification required by the govern-
mental order has more than a nominal ef-
fect on the business operations under the
facts and circumstances. See Q/A 18 for
a description of factors that may be used
for determining if a modification required
by a governmental order has more than a
nominal effect on business operations.
Example 1: Employer F, a restaurant business,
must close its restaurant to on-site dining due to a
governmental order closing all restaurants, bars, and
similar establishments for sit-down service. Employ-
er F is allowed to continue food or beverage sales to
the public on a carry-out, drive-through, or delivery
basis. On-site dining is more than a nominal portion
of Employer F’s business operations. Employer F’s
business operations are considered to be partially
suspended because, under the facts and circumstanc-
es, more than a nominal portion of its business op-
erations—its indoor and outdoor dining service—is
suspended due to the governmental order.
Example 2: Same facts as Example 1, except that
two months later, under a subsequent governmen-
tal order, Employer F is permitted to offer sit-down
service in its outdoor space, but its indoor dining
service continues to be closed. During this period,
Employer F is allowed to operate only its outdoor
sit-down and carry-out service in accordance with
the order. Indoor dining is more than a nominal por-
tion of Employer F’s business operations. Employer
F’s business operations are considered to be partially
suspended because, under the facts and circumstanc-
es, more than a nominal portion of its business opera-
tions – its indoor dining service – is suspended due to
a governmental order. The following month, under a
further governmental order, Employer F is permitted
to offer indoor dining service, in addition to outdoor
sit-down and carry-out service, provided that all
tables in the indoor dining room must be spaced at
least six feet apart. This spacing constraint has more
than a nominal effect on Employer F’s business op-
erations. During this period, even though Employer
F resumed all categories of its business operations,
Employer F’s business operations continue to be par-
tially suspended because, under the facts and circum-
stances, the governmental order restricting its indoor
dining service has more than a nominal effect on its
operations.
Example 3: Employer G, a retail business, must
close its retail storefront locations due to a govern-
mental order. The retail business also maintains a
website through which it continues to fulfill online
orders; the retailer’s online ordering and fulfillment
system is unaffected by the governmental order. The
retail storefront locations are more than a nominal
portion of Employer G’s business operations. Em-
ployer G’s business operations are considered to
have been partially suspended due to the govern-
mental order requiring it to close its retail storefront
locations, which are more than a nominal portion of
its business operations.
Example 4: Employer H, a hospital, is consid-
ered to be operating an essential business under a
governmental order with respect to its emergency
department, intensive care, and other services for
conditions requiring urgent medical care. However,
the governmental order treats Employer H’s elective
and non-urgent medical procedures as non-essential
business operations and prevents Employer H from
performing these services. Employer H suspends
operations related to elective and non-urgent medi-
cal procedures, which are more than a nominal por-
tion of Employer H’s business operations. Although
Employer H is an essential business, Employer H is
considered to have a partial suspension of operations
due to the governmental order that prevents Em-
ployer H from performing elective and non-urgent
medical procedures, which are more than a nominal
portion of its business operations under the facts and
circumstances.
Example 5: Employer I, a grocery store, is con-
sidered to be operating an essential business under
a governmental order. However, the governmental
order requires grocery stores to discontinue their
self-serve offerings, such as salad bars, though they
may offer prepared or prepackaged food. Employer I
modifies its operations to close its salad bar and other
self-serve offerings and instead offers prepackaged
salads and other items. The salad bar and other self-
serve offerings are not more than a nominal portion
of Employer I’s business operations. Further, the
governmental order requiring Employer I to discon-
tinue its self-serve offerings does not have more than
a nominal effect on Employer I’s business operations
under the facts and circumstances, even though Em-
ployer I was required to modify its business opera-
tions. Accordingly, Employer I’s business operations
are not considered to be partially suspended due to a
governmental order.
Example 6: Employer J, a large retailer, is re-
quired to close its storefront location due to a gov-
ernmental order, but is permitted to provide custom-
ers with curbside service to pick up items ordered
online or by phone. The retail storefront location is
more than a nominal portion of Employer J’s busi-
ness operations. During this period, Employer J’s
business operations are considered to have been
partially suspended due to the governmental order
requiring it to close its storefront location. Two
months later, under a subsequent governmental or-
der, Employer J is permitted to reopen its storefront
location. Under the subsequent governmental order,
however, Employer J must enforce social distancing
guidelines that require Employer J to admit only
a specified number of customers into the store per
1,000 square feet. While the governmental order re-
sults in customers waiting in line for a short period
of time to enter the store during certain busy times of
the week, the size of Employer J’s storefront is large
enough that it is able to accommodate all of its cus-
tomers after these short waits outside the store. The
governmental order requiring Employer J to enforce
social distancing guidelines does not have more than
a nominal effect on Employer J’s business operations
under the facts and circumstances, even though Em-
ployer J is required to modify its business operations.
During this period, Employer J’s business operations
are not considered to be partially suspended due to
the governmental order because the governmental
order requiring enforcement of social distancing
guidelines does not have more than a nominal effect
on its operations.
Question 18: What factors should be
taken into account in determining whether
a modification required by a governmen-
tal order has more than a nominal effect
on business operations for purposes of
Q/A–17?
Answer 18: The types of modifica-
tions that are contemplated by Q/A–17
are those required by a governmental or-
der as a condition of reopening a physical
space for business or service to the public.
Examples of these modifications include:
limiting occupancy to provide for social
distancing, requiring services to be per-

Bulletin No. 2021–11 931 March 15, 2021
formed only on an appointment basis (for
businesses that previously offered walk-in
service), changing the format of service
(for example, restrictions on buffet or self-
serve, but not prepackaged or carry-out),
or requiring employees and customers to
wear face coverings.
The mere fact that an employer must
make a modification to business opera-
tions due to a governmental order does
not result in a partial suspension unless
the modification has more than a nominal
effect on the employer’s business opera-
tions. Whether a modification required
by a governmental order has more than a
nominal effect on the business operations
is based on the facts and circumstances.
A governmental order that results in a re-
duction in an employer’s ability to provide
goods or services in the normal course of
the employer’s business of not less than
10 percent will be deemed to have more
than a nominal effect on the employer’s
business operations. For example, occu-
pancy restrictions at a restaurant with in-
door dining service may result in an ac-
tual, and more than nominal, reduction of
the restaurant’s ability to service custom-
ers; however, an occupancy restriction at
a retailer with sufficient physical space to
accommodate its customers regardless of
the restriction will likely not result in an
actual, and more than nominal, reduction
of the retailer’s ability to provide goods to
its customers.
Modifications altering customer be-
havior (for example, mask requirements
or making store aisles one way to enforce
social distancing) or that require employ-
ees to wear masks and gloves while per-
forming their duties will not result in more
than a nominal effect on the business op-
erations.
Question 19: Are an employer’s oper-
ations considered to be partially suspend-
ed for purposes of the employee retention
credit if the employer is required to reduce
its operating hours by a governmental or-
der?
Answer 19: Yes. An employer that re-
duces its operating hours due to a govern-
mental order is considered to have par-
tially suspended its operations since the
employer’s operations have been limited
by a governmental order.
Example: Employer K operates a food process-
ing facility that normally operates 24 hours a day. A
governmental order issued by the local health depart-
ment requires all food processing businesses to deep
clean their workplaces once every 24 hours in order
to reduce the risk of COVID-19 exposure. In order
to comply with the governmental order, Employer K
reduces its daily operating hours by five hours per
day so that a deep cleaning may be conducted within
its workplace once every 24 hours. Employer K is
considered to have partially suspended its operations
due to the governmental order requiring it to reduce
its hours of operation.
Question 20: Is an employer that op-
erates a trade or business in multiple lo-
cations and is subject to governmental
orders requiring full or partial suspension
of its operations in some jurisdictions, but
not in others, considered to have a partial
suspension of operations?
Answer 20: Yes. Employers that op-
erate a trade or business in multiple lo-
cations and are subject to State and local
governmental orders requiring full or
partial suspension of operations in some,
but not all, jurisdictions are considered to
have a partial suspension of operations.
Employers that operate a trade or busi-
ness on a national or regional basis may
be subject to governmental orders requir-
ing closure of their locations in certain
jurisdictions, but may not be subject to a
governmental order in other jurisdictions.
To operate in a consistent manner in all ju-
risdictions, these employers may establish
a policy that complies with the local gov-
ernmental orders, as well as the Center for
Disease Control and Prevention (CDC)
recommendations and the Department of
Homeland Security (DHS) guidance; in
this case, even though the employer may
not be subject to a governmental order to
suspend operations of its trade or business
in certain jurisdictions, and may merely
be following CDC or DHS guidelines in
those jurisdictions, the employer would
still be considered to have partially sus-
pended operations due to the governmen-
tal orders requiring closure of its business
operations in certain jurisdictions. There-
fore, the employer would be an eligible
employer with respect to all of its opera-
tions in all locations for calendar quarters
during which the employer’s operations
are partially suspended whether or not the
employer voluntarily adopts consistent
measures for its business operations in
other jurisdictions.
Example: Employer L is a national retail store
chain with operations in every state in the United
States. In some jurisdictions, Employer L is subject
to a governmental order to close its stores to custom-
ers, but is permitted to provide customers with curb-
side service to pick up items ordered online or by
phone. In these jurisdictions, Employer L determines
that it is not continuing comparable operations and
that the stores that are closed to customers are more
than a nominal portion of its business operations. In
other jurisdictions, Employer L is not subject to any
governmental order to close its stores to customers
or is considered an essential business permitting its
stores to fully remain open. Employer L establishes
a company-wide policy, in compliance with the local
governmental orders and consistent with the CDC
and DHS recommendations and guidance, requiring
the closure of all stores and operating with curbside
pick-up only, even in those jurisdictions where the
business was not subject to a governmental order.
As a result of the governmental orders requiring clo-
sure of Employer L’s stores to customers in certain
jurisdictions, Employer L has a partial suspension
of operations of its trade or business whether or not
Employer L chooses to take consistent measures for
stores in other jurisdictions. The partial suspension
results in Employer L being an eligible employer
nationwide for calendar quarters during which the
employer’s operations are partially suspended.
Question 21: If the operations of a
trade or business of one member of an
aggregated group are fully or partially
suspended due to a governmental order,
are the operations of the trade or business
of the other members of the aggregated
group considered to be fully or partially
suspended for purposes of the employee
retention credit?
Answer 21: Yes. All members of an ag-
gregated group that are treated as a single
employer under the aggregation rules are
treated as a single employer for purpos-
es of the employee retention credit. If a
trade or business is operated by multiple
members of an aggregated group, and if
the operations of one member of the ag-
gregated group are suspended due to a
governmental order, then all members of
the aggregated group are considered to
have their operations partially suspended,
even if another member of the group is in
a jurisdiction that is not subject to a gov-
ernmental order.
Example: Employer Group M is a restaurant
chain that operates a single trade or business through
multiple subsidiary corporations located in vari-
ous jurisdictions. Employer Group M is treated as
a single employer under the aggregation rules for
purposes of the employee retention credit. Certain
members of Employer Group M’s operations are
fully suspended due to a governmental order, while
other members of Employer Group M’s operations
are not subject to a governmental order and remain
open. Because Employer Group M is treated as a sin-
gle employer for purposes of the employee retention
credit, the operations of all members of Employer
Group M are treated as fully or partially suspended

March 15, 2021 932 Bulletin No. 2021–11
due to governmental orders suspending the opera-
tions of certain of Employer Group M members.
Question 22: If an employer is subject
to a governmental order to fully or partial-
ly suspend its business operations and the
order is subsequently lifted in the middle
of a calendar quarter, is the employer an
eligible employer for the entire calendar
quarter?
Answer 22: Yes. An employer with
business operations that are fully or par-
tially suspended due to a governmental or-
der during a portion of a calendar quarter
is an eligible employer for the entire cal-
endar quarter. However, only wages paid
with respect to the period during which
the employer is fully or partially suspend-
ed due to a governmental order may be
considered qualified wages.
Example: State Y issued a governmental order
for all non-essential businesses to close from March
10, 2020, through April 30, 2020, and the govern-
mental order was not extended. Pursuant to the order,
Employer N, which operates a non-essential business
in State Y, closes from March 10 through April 30.
Employer N is a large eligible employer in the first
quarter and second quarter of 2020, but may claim
the credit only for qualified wages paid from March
13, 2020, the effective date of section 2301 of the
CARES Act, through April 30, 2020, with respect to
employees who were not providing services during
this period because of the suspension of operations
due to State Y’s governmental order.
E. Significant Decline in Gross Receipts
Question 23: How is the period during
which there is a significant decline in
gross receipts determined?
Answer 23: The period during which
there is a significant decline in gross re-
ceipts is determined by identifying the
first calendar quarter in 2020 (if any) in
which an employer’s gross receipts are
less than 50 percent of its gross receipts
for the same calendar quarter in 2019. The
period during which there is a significant
decline in gross receipts ends with the
earlier of January 1, 2021, or the calendar
quarter that follows the first calendar quar-
ter in which the employer’s 2020 quarterly
gross receipts are greater than 80 percent
of its gross receipts for the same calendar
quarter in 2019
Example: Employer A’s gross receipts were
$100,000, $190,000, and $230,000 in the first, sec-
ond, and third calendar quarters of 2020, respective-
ly. Its gross receipts were $210,000, $230,000, and
$250,000 in the first, second, and third calendar quar-
ters of 2019, respectively. Thus, Employer A’s 2020
first, second, and third quarter gross receipts were
approximately 48 percent, 83 percent, and 92 per-
cent of its 2019 first, second, and third quarter gross
receipts, respectively. Accordingly, Employer A ex-
perienced a significant decline in gross receipts com-
mencing on the first day of the first calendar quarter
of 2020 (the calendar quarter in which gross receipts
were less than 50 percent of those in the same quar-
ter of 2019) and ending on the first day of the third
calendar quarter of 2020 (the quarter following the
first quarter in which the gross receipts were more
than 80 percent of those in the same quarter of 2019).
Thus, Employer A is an eligible employer during the
first and second calendar quarters of 2020.
Question 24: What are “gross receipts”
for an employer other than a tax-exempt
organization?
Answer 24: “Gross receipts” for pur-
poses of the employee retention credit, for
an employer other than a tax-exempt or-
ganization, has the same meaning as when
used under section 448(c) of the Code.
Under the section 448(c) regulations,
“gross receipts” means gross receipts of
the taxable year and generally includes
total sales (net of returns and allowanc-
es) and all amounts received for services.
In addition, gross receipts include any
income from investments, and from inci-
dental or outside sources. For example,
gross receipts include interest (including
original issue discount and tax-exempt
interest within the meaning of section
103 of the Code), dividends, rents, royal-
ties, and annuities, regardless of whether
those amounts are derived in the ordinary
course of the taxpayer’s trade or business.
Gross receipts are generally not reduced
by cost of goods sold, but are generally
reduced by the taxpayer’s adjusted basis
in certain property used in a trade or busi-
ness or capital assets sold. Gross receipts
do not include the repayment of a loan, or
amounts received with respect to sales tax
if the tax is legally imposed on the pur-
chaser of the good or service, and the tax-
payer merely collects and remits the sales
tax to the taxing authority.
Question 25: What are “gross receipts”
for a tax-exempt employer?
Answer 25: “Gross receipts” for pur-
poses of the employee retention credit,
for a tax-exempt organization, has the
same meaning as under section 6033 of
the Code. Under the section 6033 regu-
lations, “gross receipts” means the gross
amount received by the organization from
all sources without reduction for any costs
or expenses including, for example, cost
of goods or assets sold, cost of opera-
tions, or expenses of earning, raising, or
collecting such amounts. Thus, gross re-
ceipts includes, but is not limited to, the
gross amount received as contributions,
gifts, grants, and similar amounts with-
out reduction for the expenses of raising
and collecting such amounts, the gross
amount received as dues or assessments
from members or affiliated organizations
without reduction for expenses attribut-
able to the receipt of such amounts, gross
sales or receipts from business activities
(including business activities unrelated
to the purpose for which the organization
qualifies for exemption), the gross amount
received from the sale of assets without
reduction for cost or other basis and ex-
penses of sale, and the gross amount re-
ceived as investment income, such as in-
terest, dividends, rents, and royalties.
To determine whether there has been
a significant decline in gross receipts, a
tax-exempt employer computes its gross
receipts received from all of its operations
during the calendar quarter and compares
those gross receipts to the gross receipts
received for the same calendar quarter in
2019.
Question 26: For members of an ag-
gregated group, is a significant decline in
gross receipts determined based on the en-
tire group?
Answer 26: Yes. All entities that are
treated as a single employer under the ag-
gregation rules are treated as a single em-
ployer for purposes of determining wheth-
er the employer experienced a significant
decline in gross receipts.
To be an eligible employer on the basis
of a significant decline of gross receipts,
the employer must take into account the
gross receipts of all members of the ag-
gregated group. If the aggregated group
does not experience a significant decline
in gross receipts, then no member of the
group may claim the employee retention
credit on that basis.
Example: Employer B and Employer C are
members of a section 52(a) controlled group of cor-
porations and are treated as a single employer un-
der the aggregation rules. Because Employer B and
Employer C are treated as a single employer under
the aggregation rules, they must be treated as a sin-
gle employer for purposes of determining whether
there has been a significant decline in gross receipts.
Neither Employer B nor Employer C is subject to a
governmental order suspending business operations.
Employer B has gross receipts of $1,000,000 in the
second quarter of 2019 and $400,000 in the second

Bulletin No. 2021–11 933 March 15, 2021
quarter of 2020. Employer C has gross receipts of
$1,000,000 in second quarter of 2019 and $750,000
in second quarter of 2020. Although Employer B’s
gross receipts in the second quarter of 2020 were
40 percent of its 2019 second quarter gross receipts,
neither Employer B nor Employer C can claim the
employee retention credit due to a significant decline
in gross receipts. This is because Employers B and
C are treated as a single employer for purposes of
the employee retention credit and had combined
gross receipts of $2,000,000 in the second quarter of
2019 and $1,150,000 in the second quarter of 2020.
Their combined gross receipts for the second quarter
of 2020 would have had to be less than $1,000,000
(50 percent of $2,000,000) for Employers B and C
to have experienced a significant decline in gross re-
ceipts for the second quarter of 2020.
Question 27: How does an employer
that started its business in 2019 determine
whether it experienced a significant de-
cline in gross receipts for purposes of the
employee retention credit?
Answer 27: An employer that started its
business in the first quarter of 2019 should
use the gross receipts for the applicable
quarter of 2019, as described below, for
comparison to the gross receipts for the
same quarter in 2020 to determine wheth-
er it experienced a significant decline in
gross receipts in any quarter of 2020.
An employer that started its business
in the second quarter of 2019 should use
that quarter as the base period to deter-
mine whether it experienced a significant
decline in gross receipts for the first two
quarters in 2020 and should use the third
and fourth quarters of 2019 for compar-
ison to the third and fourth quarters of
2020, respectively, to determine wheth-
er it experienced a significant decline in
gross receipts for those quarters.
An employer that started its business
in the third quarter of 2019 should use
that quarter as the base period to deter-
mine whether it experienced a signifi-
cant decline in gross receipts for the first
three quarters in 2020 and should use the
fourth quarter of 2019 for comparison to
the fourth quarter of 2020 to determine
whether it experienced a significant de-
cline in gross receipts for that quarter.
An employer that started its business
in the fourth quarter of 2019 should use
that quarter as the base period to deter-
mine whether it experienced a significant
decline in gross receipts for any quarter in
2020.
If an employer commenced business in
the middle of a quarter in 2019, the em-
ployer should estimate the gross receipts
it would have had for the entire quarter
based on the gross receipts for the por-
tion of the quarter that the business was
in operation. To calculate this amount, the
employer may use any reasonable method,
including extrapolating the gross receipts
for the quarter based on the gross receipts
for the number of days its business was
operating during the quarter.
Question 28: How does an employer
that acquires a trade or business during the
2020 calendar year determine if the em-
ployer experienced a significant decline in
gross receipts?
Answer 28: For purposes of the em-
ployee retention credit, to determine
whether an employer experiences a sig-
nificant decline in gross receipts, an em-
ployer that acquires (in an asset purchase,
stock purchase, or any other form of ac-
quisition) a trade or business during 2020
(an acquired business) is required to in-
clude the gross receipts from the acquired
business in its gross receipts computation
for each calendar quarter that it owns and
operates the acquired business. Solely for
purposes of the employee retention cred-
it, when an employer compares its gross
receipts for a 2020 calendar quarter when
it owns an acquired business to its gross
receipts for the same calendar quarter in
2019, the employer may, to the extent the
information is available, include the gross
receipts of the acquired business in its
gross receipts for the 2019 calendar quar-
ter. Under this safe harbor approach, the
employer may include these gross receipts
regardless of the fact that the employer did
not own the acquired business during that
2019 calendar quarter.
An employer that acquires a trade or
business in the middle of a calendar quar-
ter in 2020 and that chooses to use this
safe harbor approach must estimate the
gross receipts it would have had from that
acquired business for the entire quarter
based on the gross receipts for the portion
of the quarter that it owned and operated
the acquired business. However, an em-
ployer that chooses not to use this safe
harbor approach is required to include
only the gross receipts from the acquired
business for the portion of the quarter that
it owned and operated the acquired busi-
ness.
Example: Employer D acquired all of the assets
of a trade or business in a taxable transaction on Jan-
uary 1, 2020. The gross receipts of the acquired busi-
ness were $50,000 for the quarter beginning January
1, 2020, and ending March 31, 2020, and $200,000
for the quarter beginning January 1, 2019, and ending
March 31, 2019. Employer D has access to the books
and records from the prior owner of the acquired
trade or business and can determine the amount of
gross receipts attributable to the trade or business for
the quarter beginning January 1, 2019, and ending
March 31, 2019. For purposes of the employee re-
tention credit, Employer D must include $50,000 in
its gross receipts computation for the quarter begin-
ning January 1, 2020, and ending March 31, 2020
(because Employer D actually owned the trade or
business) and may include $200,000 in its gross re-
ceipts computation for the quarter beginning January
1, 2019, and ending March 31, 2019.
F. Maximum Amount of Employer’s
Employee Retention Credit
Question 29: How is the maximum
amount of the employee retention cred-
it available to eligible employers deter-
mined?
Answer 29: The credit equals 50 per-
cent of qualified wages (including allo-
cable qualified health plan expenses) that
an eligible employer pays in a calendar
quarter. The maximum amount of quali-
fied wages (including allocable qualified
health plan expenses) taken into account
with respect to each employee for all cal-
endar quarters in 2020 is $10,000, which
means that the maximum credit for qual-
ified wages (including allocable qualified
health plan expenses) paid to any employ-
ee in 2020 is $5,000.
If an employee is employed by two or
more entities treated as a single employ-
er under the aggregation rules, the max-
imum amount of qualified wages for all
calendar quarters that may be taken into
account with respect to that employee is
$10,000 in the aggregate; thus, an aggre-
gated group treated as a single employer
may not claim more than the maximum
credit of $5,000 with respect to any one
individual employed by the members of
the aggregated group. With respect to such
an employee, the amount of the employ-
ee retention credit that may be claimed
by any member of an aggregated group
is based on the member’s proportionate
share of qualified wages giving rise to the
credit per the return period for which the
credit is claimed.
Example 1: Employer A is an eligible employer
and pays $10,000 in qualified wages to Employee B
in the second quarter of 2020. The employee reten-

March 15, 2021 934 Bulletin No. 2021–11
tion credit available to Employer A for the qualified
wages paid to Employee B is $5,000.
Example 2: Employer C is an eligible employer
and pays $8,000 in qualified wages to Employee D
in the second quarter 2020 and $8,000 in qualified
wages in the third quarter 2020. The credit available
to Employer C for the qualified wages paid to Em-
ployee D is equal to $4,000 in the second quarter and
$1,000 in the third quarter due to the overall limit
of 50 percent of $10,000 of qualified wages per em-
ployee for all calendar quarters.
Example 3: Employer E and Employer F are
members of an aggregated group treated as a single
employer and together are an eligible employer. Em-
ployee G is employed by both Employer E and Em-
ployer F. Employee G received $10,000 in qualified
wages from each employer during the second quarter
of 2020, for a total of $20,000. Because Employers E
and F are treated as a single employer under the ag-
gregation rules, the total amount of qualified wages
that may be taken into account for determining the
employee retention credit with respect to Employ-
ee G is limited to $10,000, and the maximum credit
available for qualified wages paid to Employee G is
$5,000. Employers E and F can claim their propor-
tionate share of the $5,000 credit. Since Employers E
and F paid equal amounts of qualified wages to Em-
ployee G, they can each claim $2,500. Additionally,
because Employers E and F each paid the maximum
amount of qualified wages ($10,000) to Employee G
during the second quarter, Employers E and F are
not entitled to the employee retention credit for wag-
es paid to Employee G in any remaining quarter in
2020.
G. Qualified Wages
Question 30: What are “qualified wag-
es”?
Answer 30: Qualified wages are gen-
erally limited to wages (as defined in sec-
tion 3121(a) of the Code) and compensa-
tion (as defined in section 3231(e) of the
Code), both determined without regard to
the social security wage base, paid by an
eligible employer to some or all of its em-
ployees after March 12, 2020, and before
January 1, 2021.
15
Section 2301(c)(5)(B)
of the CARES Act provides that “wages”
include amounts paid by an eligible em-
ployer to provide and maintain a group
health plan (as defined in section 5000(b)
(1) of the Code), but only to the extent that
the amounts are excluded from the gross
income of employees by reason of section
106(a) of the Code. Amounts treated as
wages under section 2301(c)(5)(B) of the
CARES Act are treated as paid with re-
spect to any employee (and with respect to
any period) to the extent the amounts are
properly allocable to the employee (and to
the period), and, except as otherwise pro-
vided by the Secretary, the allocation will
be treated as proper if made on the basis of
being pro rata among periods of coverage.
See Q/As 41 and 42. Qualified wages do
not include qualified sick leave wages and
qualified family leave wages taken into
account under sections 7001 and 7003 of
the FFCRA.
The specific circumstances in which
wage payments by an eligible employer
will be considered qualified wages de-
pend, in part, on the average number of
full-time employees the eligible employer
employed during 2019. For a large eligi-
ble employer (more than 100 employees),
qualified wages are the wages paid to an
employee for time that the employee is not
providing services due to either (1) a full
or partial suspension of the employer’s
business operations due to a governmental
order, or (2) the business experiencing a
significant decline in gross receipts. For a
small eligible employer (100 or fewer em-
ployees), qualified wages are the wages
paid with respect to an employee during
any period in the calendar quarter in
which the business operations are fully or
partially suspended due to a governmen-
tal order or during any calendar quarter in
which the business is experiencing a sig-
nificant decline in gross receipts.
Example: Employer A is a small eligible employ-
er that has had a partial suspension of its business
operations due to a governmental order. Employer
A offers its employees various benefits that provide
for pre-tax salary reduction contributions, including
a qualified section 401(k) plan, a fully-insured group
health plan, a dependent care assistance program sat-
isfying the requirements of section 129 of the Code,
and qualified transportation benefits satisfying the
requirements of section 132(f) of the Code. Employ-
er A also makes matching and nonelective contribu-
tions to the qualified section 401(k) plan and pays the
portion of the cost of maintaining the group health
plan remaining after the employees’ share. None of
these amounts are wages taken into account for pur-
poses of the credits claimed under sections 7001 and
7003 of the FFCRA.
Employer A may treat as qualified wages the
amounts its employees contribute as pre-tax sala-
ry reduction contributions to the qualified section
401(k) plan with respect to the period of the partial
suspension of operations because those amounts are
wages within the meaning of section 3121(a).
Employer A may also treat all amounts
paid toward maintaining the group health
plan (including any employee pre-tax sal-
ary reduction contribution) with respect to
the period of the partial suspension of op-
erations as qualified health plan expenses
and thus as qualified wages.
Employer A may not treat as qualified
wages the amounts Employer A contrib-
utes as matching or nonelective contribu-
tions to the qualified section 401(k) plan,
nor may it treat as qualified wages any em-
ployee pre-tax salary reduction contribu-
tions toward the dependent care assistance
program or qualified transportation bene-
fits. These amounts do not constitute wag-
es within the meaning of section 3121(a)
and therefore are not qualified wages for
purposes of the employee retention credit.
Question 31: How does an eligible em-
ployer identify the average number of full-
time employees employed during 2019?
Answer 31: The term “full-time employ-
ee” means an employee who, with respect
to any calendar month in 2019, had an aver-
age of at least 30 hours of service per week
or 130 hours of service in the month (130
hours of service in a month is treated as
the monthly equivalent of at least 30 hours
of service per week), as determined in ac-
cordance with section 4980H of the Code.
An employer that operated its business for
the entire 2019 calendar year determines
the number of its full-time employees by
taking the sum of the number of full-time
employees in each calendar month in 2019
and dividing that number by 12.
An employer that started its business
operations during 2019 determines the
number of its full-time employees by
taking the sum of the number of full-time
employees in each full calendar month
in 2019 in which the employer operated
its business and dividing that sum by the
number of full calendar months in 2019
in which the employer operated its busi-
ness.
An employer that started its business
operations during 2020 determines the
number of its full-time employees by tak-
ing the sum of the number of full-time
employees in each full calendar month in
2020 in which the employer operated its
15
As noted above, this notice does not provide guidance with respect to the extension of the credit for qualified wages paid after December 31, 2020, and before July 1, 2021.

Bulletin No. 2021–11 935 March 15, 2021
business and dividing by that number of
months, consistent with the approach de-
scribed above for employers that began
business operations during 2019.
Question 32: For members of an ag-
gregated group, is the average number of
full-time employees determined based on
the entire group?
Answer 32: Yes. All entities that are
treated as a single employer under the
aggregation rules are treated as a single
employer for purposes of determining the
employer’s average number of employees.
Example: Employers B and C each averaged 75
full-time employees in 2019. Employers B and C are
treated as a single employer under the aggregation
rules and therefore are treated as a single employer
for purposes of determining the employee retention
credit; they are an eligible employer. Employers B
and C together averaged 150 full-time employees
in 2019. Because Employers B and C are a large
eligible employer, each employer is eligible for the
employee retention credit only for wages paid to an
employee that is not providing services due to either
(1) a full or partial suspension of operations by gov-
ernmental order, or (2) a significant decline in gross
receipts.
Question 33: What wages may a small
eligible employer treat as qualified wages?
Answer 33: Small eligible employers
may treat all wages (other than any wag-
es taken into account under sections 7001
and 7003 of the FFCRA) paid after March
12, 2020, and before January 1, 2021, with
respect to their employees during any pe-
riod in the calendar quarter in which the
employer’s business operations are fully
or partially suspended due to a govern-
mental order or during a calendar quarter
in which the employer experiences a sig-
nificant decline in gross receipts as qual-
ified wages. Only $10,000 of qualified
wages may be taken into account for the
employee retention credit per employee
for all calendar quarters.
Question 34: What wages may a large
eligible employer treat as qualified wages?
Answer 34: Large eligible employers
may treat wages (other than any wages
taken into account under sections 7001
and 7003 of the FFCRA) paid to employ-
ees after March 12, 2020, and before Jan-
uary 1, 2021, only for the time they are not
providing services during the period in the
calendar quarter in which the employer’s
business operations are fully or partially
suspended due to a governmental order
or during a calendar quarter in which the
employer experiences a significant decline
in gross receipts as qualified wages. Large
eligible employers may not treat wages as
qualified wages if they were paid to em-
ployees for the time that they provide ser-
vices to the employer. Also, only $10,000
of qualified wages may be taken into ac-
count for the employee retention credit
per employee for all calendar quarters.
Example 1: Employer D, a large eligible employ-
er operating a local chain of full service restaurants
in State X, is subject to a governmental order for
restaurants to discontinue sit-down service to cus-
tomers inside the restaurant, but may continue food
or beverage sales to the public on a carry-out, drive-
through, or delivery basis. Employer D continues
to pay wages to kitchen staff and certain waitstaff
needed to facilitate fulfillment of carry-out orders.
Wages paid to these employees for the time that they
provide carry-out service are not qualified wages.
Example 2: Employer E is a large eligible em-
ployer and was forced to suspend operations at the
end of the first calendar quarter in 2020. Its employ-
ees performed services during the first part of the
calendar quarter but then stopped due to the suspen-
sion of operations; however, Employer E continued
to pay the employees’ normal wages for the entire
quarter, including the period during which they were
not providing services. None of the wages were tak-
en into account under sections 7001 and 7003 of the
FFCRA. The wages paid during the period when
employees were not providing services are qualified
wages.
Question 35: May a large eligible em-
ployer claim an employee retention credit
for an increase in the amount of wages it
paid its employees during the time that
employees are not providing services?
Answer 35: No. For large eligible em-
ployers, qualified wages paid to an em-
ployee may not exceed what the employ-
ee would have been paid for working an
equivalent duration during the 30 days im-
mediately preceding the commencement
of the full or partial suspension of the
operation of the trade or business or the
first day of the calendar quarter in which
the employer experienced a significant de-
cline in gross receipts. For a variable hour
employee, the amount paid for working
an equivalent duration during that 30-day
period may be determined using any rea-
sonable method. The method(s) that the
Department of Labor has prescribed to
determine the amount to pay an employee
with an irregular schedule who is eligi-
ble for paid sick leave under the FFCRA
would be considered reasonable for this
purpose.
Example: Employer F, a large eligible employer
operating a grocery store chain, is subject to a gov-
ernmental order limiting store hours. In response,
Employer F has reduced the hours its employees
work, but increases the rate of pay for those em-
ployees who continue to provide services by $2 an
hour. Only the amounts paid to employees for time
they are not providing services, and at the rate of pay
in effect prior to the increase, would be considered
qualified wages.
Question 36: May a large eligible em-
ployer treat the wages paid to hourly and
non-exempt salaried employees for hours
for which they are not providing services
as qualified wages for purposes of the em-
ployee retention credit?
Answer 36: Yes, assuming the wages
otherwise satisfy the requirements to be
qualified wages. For a large eligible em-
ployer, wages paid to hourly and non-ex-
empt salaried employees for hours that
the employees were not providing ser-
vices may be considered qualified wages
for purposes of the employee retention
credit. For an employee who does not
have a fixed schedule of work, the hours
for which the employee is not providing
services may be determined using any rea-
sonable method. The method that the large
eligible employer would use to determine
the employee’s entitlement to leave under
the Family and Medical Leave Act would
be a reasonable method for this purpose.
Similarly, the method(s) that the Depart-
ment of Labor has prescribed to determine
the number of hours for which an employ-
ee with an irregular schedule is eligible for
paid sick leave under the FFCRA would
be considered reasonable for this purpose.
It is not reasonable for the employer to
treat an employee’s hours as having been
reduced based on an assessment of the
employee’s productivity levels during the
hours the employee is working.
Wages paid by a large eligible employ-
er to its employees for hours for which
they provided services are not considered
qualified wages for purposes of the em-
ployee retention credit.
Example 1: Employer G, a large eligible employ-
er operating a manufacturing business, has several
locations the operations of which are fully suspended
during the second quarter of 2020 due to a govern-
mental order. Employer G continues to pay hourly
employees who are not providing services at the
closed locations 50 percent of their normal hourly
wage rates. Employer G also reduced headquarters’
administrative staff hours by 40 percent, but contin-
ues to pay them at 100 percent of their normal hourly
wage rates. Employer G does not take the wages into
account under sections 7001 and 7003 of the FF-
CRA. For employees who are not providing services
due to the closure of their location, but are receiving
50 percent of their normal hourly wage rates, Em-
ployer G may treat the wages paid as qualified wages

March 15, 2021 936 Bulletin No. 2021–11
for purposes of the employee retention credit. For the
administrative staff whose hours were reduced by 40
percent, but who are paid for 100 percent of the nor-
mal wage rate, Employer G may treat the 40 percent
of wages paid for time that these employees are not
providing services as qualified wages for purposes
of the employee retention credit. The 60 percent of
wages that Employer G pays the administrative staff
for hours during which the employees are actually
providing services is not considered qualified wages
for purposes of the employee retention credit.
Example 2: Employer H is a large eligible em-
ployer in the business of staging homes that are for
sale. Employer H’s non-exempt salaried employees
cannot perform their usual services of delivering
and installing furniture to be used in staging hous-
es because open houses are prohibited in its service
area during the second quarter of 2020. However,
the employees are required to provide Employer H
with periodic status updates about furniture that has
been leased out and other administrative matters.
Employer H continues to pay wages to employees
as if they continued to work their typical work hours
even though the employees cannot provide their nor-
mal services. Using a reasonable method, Employer
H has determined that its employees are working 20
percent of their typical work hours. Employer H does
not take the wages into account under sections 7001
and 7003 of the FFCRA. Employer H may treat 80
percent of the wages paid as qualified wages for pur-
poses of the employee retention credit.
Question 37: May a large eligible em-
ployer treat wages paid to exempt salaried
employees for time for which they are not
providing services as qualified wages for
purposes of the employee retention credit?
Answer 37: Yes, provided the wages
paid to the exempt salaried employees
are for the time that they are not provid-
ing services due to either a full or partial
suspension of operations (due to a govern-
mental order) or a significant decline in
gross receipts. An eligible employer may
use any reasonable method to determine
the number of hours that a salaried em-
ployee is not providing services, but for
which the employee receives wages either
at the employee’s normal wage rate or at
a reduced wage rate. Reasonable methods
include the method (or methods) the em-
ployer uses to measure exempt employ-
ees’ entitlement to leave on an intermittent
or reduced leave schedule under the Fam-
ily and Medical Leave Act, or the method
the employer uses to measure exempt em-
ployees’ entitlement to and usage of paid
leave under the employer’s usual practic-
es. It is not reasonable for the employer to
treat an employee’s hours as having been
reduced based on an assessment of the
employee’s productivity levels during the
hours the employee is working.
Example 1: Employer I, a large eligible employer
operating a fitness club business, closed all of its lo-
cations in City B due to a governmental order issued
by City B’s mayor. Employer I continues to pay its
exempt managerial employees their regular salaries.
While the clubs are closed and there is not sufficient
administrative work to occupy the managerial em-
ployees full-time, they continue to perform some ac-
counting and similar administrative functions. Em-
ployer I has determined, based on the time records
maintained by employees, that they are providing
services for 10 percent of their typical work hours.
Employer I does not take the wages into account un-
der sections 7001 and 7003 of the FFCRA. In this
case, 90 percent of wages paid to these employees
during the period the clubs were closed are qualified
wages.
Example 2: Employer J, a large eligible employ-
er operating a consulting firm, closed its offices due
to various governmental orders and required all em-
ployees to telework. Although Employer J believes
that some of its employees may not be as produc-
tive while working remotely, employees are working
their normal business hours. Because employees’
work hours have not changed, no portion of the wag-
es paid to the employees by Employer J are qualified
wages.
Question 38: May an eligible employer
treat wages paid to employees pursuant to
a pre-existing vacation, sick and other per-
sonal leave policy as qualified wages for
purposes of the employee retention credit?
Answer 38: A large eligible employer
may not treat as qualified wages amounts
paid to employees for paid time off for va-
cations, holidays, sick days and other days
off. These wages are paid pursuant to ex-
isting leave policies that represent benefits
accrued during a prior period in which the
employees provided services and are not
wages paid for time in which the employ-
ees are not providing services.
However, a small eligible employer
may treat all wages paid with respect to
employees during the period of the full or
partial suspension of operations or a cal-
endar quarter in which it has a significant
decline in gross receipts, even if under a
pre-existing vacation, sick and other leave
policy, as qualified wages for purposes of
the employee retention credit, assuming
the wages are not taken into account under
sections 7001 and 7003 of the FFCRA.
Question 39: May an eligible employer
treat payments made to former employees
who have terminated employment as qual-
ified wages for purposes of the employee
retention credit?
Answer 39: Payments, including sev-
erance payments or other post-termination
payments, made to a former employee
following termination of employment are
not considered qualified wages for pur-
poses of the employee retention credit.
Payments may be considered qualified
wages only if the payments are made to
an employee while employed by the eligi-
ble employer. Payments made in connec-
tion with a former employee’s termination
of employment are not qualified wages
because they are payments for the past
employment relationship and thus are not
payments made with respect to an employ-
ee during the time for which the employee
retention credit may be claimed. Whether
an employee has terminated employment
is based on all of the facts and circum-
stances, including whether the employer
has treated the employment relationship
as terminated for purposes other than the
continuation of wage payments.
H. Allocable Qualified Health Plan
Expenses
Question 40: Do qualified health plan
expenses include both the portion of the
cost paid by the eligible employer and the
portion of the cost paid by the employee?
Answer 40: Yes. However, amounts
that the employee paid for with after-tax
contributions are not considered quali-
fied health plan expenses. The amount of
qualified health plan expenses taken into
account in determining the amount of
qualified wages generally includes both
the portion of the cost paid by the eligi-
ble employer and the portion of the cost
paid by the employee with pre-tax salary
reduction contributions.
Question 41: May a small eligible em-
ployer treat its health plan expenses as
qualified wages for purposes of the em-
ployee retention credit?
Answer 41: A small eligible employer
may treat its health plan expenses paid or
incurred, after March 12, 2020, and be-
fore January 1, 2021, with respect to any
employee during any period in a calendar
quarter in which the employer’s business
operations are fully or partially suspend-
ed due to a governmental order or during
a calendar quarter in which the employer
experiences a significant decline in gross
receipts as qualified wages, although only
$10,000 per employee for all calendar
quarters can be taken into account for the
employee retention credit. Small eligible

Bulletin No. 2021–11 937 March 15, 2021
employers may treat health plan expenses
allocable to the applicable periods as qual-
ified wages even if the employees are not
working and the eligible employer does
not pay the employees any wages for the
time they are not working.
Example 1: Employer A is a small eligible em-
ployer subject to a governmental order that partial-
ly suspends the operation of its trade or business.
In response to the governmental order, Employer
A reduces all employees’ hours by 50 percent. It
pays wages to the employees only for the time the
employees are providing services, but Employer A
continues to provide the employees with full health
care coverage. Employer A’s health plan expenses al-
locable to wages paid during the period its operations
were partially suspended may be treated as qualified
wages for purposes of the employee retention credit.
Example 2: Employer B is a small eligible em-
ployer subject to a governmental order that suspends
the operation of its trade or business. In response to
the governmental order, Employer B lays off or fur-
loughs all of its employees (but does not treat these
employees as terminated for employment tax pur-
poses). It does not pay wages to its employees for the
time they are laid off or furloughed and not working,
but it continues the employees’ health care coverage.
Employer B’s health plan expenses allocable to the
period its operations were partially suspended may
be treated as qualified wages for purposes of the em-
ployee retention credit.
Question 42: May a large eligible em-
ployer treat its health plan expenses as
qualified wages for purposes of the em-
ployee retention credit if the expenses are
allocable to the time that employees were
not providing services?
Answer 42: A large eligible employer
may treat as qualified wages health plan
expenses paid or incurred, after March 12,
2020, and before January 1, 2021, alloca-
ble to the time that the employees are not
providing services during any period in a
calendar quarter in which the employer’s
business operations are fully or partially
suspended due to a governmental order or
a calendar quarter in which the employer
experiences a significant decline in gross
receipts, although only $10,000 per em-
ployee for all calendar quarters can be
taken into account for the employee re-
tention credit. However, a large eligible
employer may not treat as qualified wages
health plan expenses allocable to the time
the employees are providing services.
Example 1: Employer C is a large eligible em-
ployer subject to a governmental order that partially
suspends the operation of its trade or business. In
response to the governmental order, Employer C re-
duces all employees’ hours by 50 percent and pays
wages to its employees only for the time that the em-
ployees are providing services, but Employer C con-
tinues to provide the employees with full health care
coverage. The 50 percent of Employer C’s health
plan expenses allocable to the time that employees
are not providing services may be treated as qualified
wages. Employer C may not treat the other 50 per-
cent of health plan expenses allocable to the time the
employees are providing services as qualified wages.
Example 2: Employer D is a large eligible em-
ployer subject to a governmental order that partial-
ly suspends the operations of its trade or business.
In response to the governmental order, Employer D
reduces its employees’ hours by 50 percent, but it re-
duces its employees’ wages by only 40 percent, so
that the employees receive 60 percent of their wag-
es for 50 percent of their normal hours. Employer
D continues to cover 100 percent of the employees’
health plan expenses. Employer D may treat as qual-
ified wages: (i) the 10 percent of the wages that it
pays employees for time the employees are not pro-
viding services, plus (ii) 50 percent of the health plan
expenses, because these health plan expenses are
allocable to the time that employees were not pro-
viding services.
Example 3: Employer E is a large eligible em-
ployer subject to a governmental order that fully sus-
pends the operations of its trade or business. Employ-
er E lays off or furloughs its employees (but does not
treat these employees as terminated for employment
tax purposes) and does not pay wages to the employ-
ees, but does continue to cover 100 percent of the
employees’ health plan expenses. Employer E may
treat as qualified wages the health plan expenses that
are allocable to the time that the employees are not
providing services.
Question 43: For an eligible employer
that sponsors more than one plan for its
employees (for example, both a group
health plan and a health flexible spending
arrangement (health FSA)), or more than
one plan covering different employees,
how are the qualified health plan expenses
for each employee determined?
Answer 43: The qualified health plan
expenses are determined separately for
each plan. For each plan, those expenses
are allocated to the employees who par-
ticipate in that plan. In the case of an em-
ployee who participates in more than one
plan, the allocated expenses of each plan
in which the employee participates are ag-
gregated for that employee.
Question 44: For an eligible employer
that sponsors a fully-insured group health
plan, how are the qualified health plan ex-
penses of that plan allocated on a pro rata
basis?
Answer 44: An eligible employer who
sponsors a fully-insured group health plan
may use any reasonable method to de-
termine and allocate the plan expenses,
including (1) the COBRA applicable pre-
mium for the employee typically available
from the insurer, (2) one average premium
rate for all employees, or (3) a substantial-
ly similar method that takes into account
the average premium rate determined sep-
arately for employees with self-only and
other than self-only coverage.
If an eligible employer chooses to use
one average premium rate for all employ-
ees, the allocable amount for each day an
employee covered by the insured group
health plan is entitled to qualified wages
could be determined using the following
steps:
(1) The eligible employer’s overall an-
nual premium for the employees cov-
ered by the policy is divided by the
number of employees covered by the
policy to determine the average annu-
al premium per employee.
(2) The average annual premium per
employee is divided by the average
number of work days during the year
for all covered employees (treating
days of paid leave as a work day and
a work day as including any day on
which work is performed) to deter-
mine the average daily premium per
employee. For example, a full-year
employee working five days per week
may be treated as working 52 weeks
x 5 days or 260 days. Calculations
for part-time and seasonal employ-
ees who participate in the plan should
be adjusted as appropriate. Eligible
employers may use any reasonable
method for calculating work days for
part-time and seasonal employees.
(3) The resulting premium should be ad-
justed to reflect any portion that em-
ployees contribute after-tax.
(4) The resulting amount is the amount
allocated to each day of qualified
wages.
Example: Employer F sponsors an insured group
health plan that covers 400 employees, some with
self-only coverage and some with family coverage.
Each employee is expected to have 260 work days
a year (i.e., five days a week for 52 weeks). The
employees contribute a portion of their premium
by pre-tax salary reduction, with different amounts
for self-only and family coverage. The total annual
premium for the 400 employees is $5.2 million (this
includes both the amount paid by the eligible em-
ployer and the amounts paid by employees through
salary reduction).
For an eligible employer using one
average premium rate for all employees,
the average annual premium rate is $5.2
million divided by 400, or $13,000. For
each employee expected to have 260 work

March 15, 2021 938 Bulletin No. 2021–11
days a year, this results in a daily average
premium rate equal to $13,000 divided
by 260, or $50. This $50 is the amount of
qualified health plan expenses allocated to
each day of qualified wages per employee.
Question 45: For an eligible employer
that sponsors a self-insured group health
plan, how are the qualified health plan ex-
penses of that plan allocated on a pro rata
basis?
Answer 45: An eligible employer who
sponsors a self-insured group health plan
may use any reasonable method to deter-
mine and allocate the qualified health plan
expenses, including (1) the COBRA appli-
cable premium for the employee typically
available from the administrator, or (2)
any reasonable actuarial method to deter-
mine the estimated annual expenses of the
plan.
If the eligible employer uses a reason-
able actuarial method to determine the
estimated annual expenses of the plan,
then rules similar to the rules for insured
plans are used to determine the amount of
qualified health plan expenses allocated
to an employee. That is, the estimated an-
nual expense is divided by the number of
employees covered by the plan, and that
amount is divided by the average num-
ber of work days during the year for all
covered employees (treating days of paid
leave as work days and any day on which
an employee performs any work as a work
day). The resulting premium should then
be adjusted to reflect any portion that em-
ployees contribute after-tax. The resulting
amount is the amount allocated to each
day of qualified wages.
Question 46: For an eligible employer
who contributes to a health savings ac-
count (HSA), or Archer Medical Saving
Account (Archer MSA) and sponsors a
high deductible health plan (HDHP), are
contributions to the HSA or Archer MSA
included in the qualified health plan ex-
penses?
Answer 46: The amount of qualified
health plan expenses does not include an
eligible employer’s contributions to an
HSA or Archer MSA. An eligible employ-
er who sponsors an HDHP should calcu-
late the amount of qualified health plan
expenses in the same manner as an insured
group health plan, or a self-insured plan,
as applicable.
Question 47: For an eligible employ-
er who sponsors a health reimbursement
arrangement (HRA), a health flexible
spending arrangement (health FSA), or
a qualified small employer health reim-
bursement arrangement (QSEHRA), are
contributions to the HRA, health FSA, or
QSEHRA included in the qualified health
plan expenses?
Answer 47: The amount of qualified
health plan expenses may include contri-
butions to an HRA (including an individ-
ual coverage HRA), or a health FSA, but
not contributions to a QSEHRA. To allo-
cate contributions to an HRA or a health
FSA, eligible employers should use the
amount of contributions made by or on
behalf of the particular employee.
Question 48: Are health plan expenses
that are allocable to qualified sick leave
wages and qualified family leave wages
for purposes of credits available under
sections 7001 and 7003 of the FFCRA
excluded from the definition of qualified
wages for purposes of the employee reten-
tion credit?
Answer 48: Yes. Wages for which an
eligible employer may claim the em-
ployee retention credit do not include the
qualified sick leave wages and qualified
family leave wages for which it claims
credits under sections 7001 and 7003 of
the FFCRA. This exclusion also applies to
the health plan expenses that are alloca-
ble to these qualified sick leave wages and
qualified family leave wages paid under
sections 7001 and 7003 the FFCRA.
I. Interaction with Paycheck Protection
Program (PPP) Loans
Question 49: May an employer that re-
ceived a PPP loan be eligible for the em-
ployee retention credit?
Answer 49: Yes. An employer that re-
ceived a PPP loan may claim the employ-
ee retention credit for any qualified wages
paid to employees if the employer is an
eligible employer that meets the require-
ments for the credit.
16
However, qualified
wages for which the employer claims the
employee retention credit are excluded
from payroll costs paid during the covered
period (payroll costs) that qualify for for-
giveness under the PPP. See section 7A(a)
(12) of the Small Business Act, as amend-
ed by section 206(c)(1) of the Relief Act.
Section 2301(g)(1) of the CARES Act,
as amended by the Relief Act, permits an
eligible employer to elect not to take into
account certain qualified wages for pur-
poses of the employee retention credit.
An eligible employer generally makes the
election by not claiming the employee re-
tention credit for those qualified wages on
its federal employment tax return. How-
ever, an eligible employer that received
a PPP loan is deemed to have made the
election under section 2301(g)(1) of the
CARES Act for those qualified wages in-
cluded in the amount reported as payroll
costs on a Paycheck Protection Program
Loan Forgiveness Application (PPP Loan
Forgiveness Application). Specifically,
the amount for which the eligible employ-
er is deemed to have made the election is
the amount of qualified wages included
in the payroll costs reported on the PPP
Loan Forgiveness Application up to (but
not exceeding) the minimum amount of
payroll costs, together with any other el-
igible expenses reported on the PPP Loan
Forgiveness Application, sufficient to
support the amount of the PPP loan that
is forgiven. The employee retention credit
does not apply to the qualified wages for
which the election or deemed election is
made. An eligible employer is not deemed
to have made an election for any quali-
fied wages paid by the eligible employer
that are not included in the payroll costs
reported on the PPP Loan Forgiveness Ap-
plication. Notwithstanding a deemed elec-
tion, if an eligible employer reports any
qualified wages as payroll costs on a PPP
Loan Forgiveness Application to obtain
forgiveness of the PPP loan amount, but
the loan amount is not forgiven by reason
of a decision under section 7A(g) of the
Small Business Act, those qualified wages
may subsequently be treated as subject to
section 2301 of the CARES Act and may
be taken into account for purposes of the
16
Section 206(c)(2)(B)(i) of the Relief Act struck section 2301(j) of the CARES Act, effective retroactive to March 27, 2020, the date of enactment of the CARES Act. As originally enacted,
section 2301(j) of the CARES Act provided that an employer that received a PPP loan would not be eligible for the employee retention credit. With the elimination of this provision, an eligible
employer is no longer prohibited from both claiming the employee retention credit and receiving a PPP loan.

Bulletin No. 2021–11 939 March 15, 2021
employee retention credit. If an eligible
employer obtains forgiveness of only a
portion of the PPP loan amount, then the
employer is deemed to have made an elec-
tion for the minimum amount of qualified
wages included in the payroll costs report-
ed on the PPP Loan Forgiveness Applica-
tion necessary to obtain the forgiveness of
that amount of the PPP loan.
Example 1: Employer A received a PPP loan of
$100,000. Employer A is an eligible employer and
paid $100,000 in qualified wages that would qualify
for the employee retention credit during the second
and third quarters of 2020. In order to receive for-
giveness of the PPP loan in its entirety, Employer
A was required, under the Small Business Admin-
istration (SBA) rules, to report a total of $100,000
of payroll costs and other eligible expenses (and a
minimum of $60,000 of payroll costs). Employer A
submitted a PPP Loan Forgiveness Application and
reported the $100,000 of qualified wages as payroll
costs in support of forgiveness of the entire PPP loan.
Employer A received a decision under section 7A(g)
of the Small Business Act in the first quarter of 2021
for forgiveness of the entire PPP loan amount of
$100,000.
Employer A is deemed to have made an election
not to take into account $100,000 of the qualified
wages for purposes of the employee retention credit,
which was the amount of qualified wages included
in the payroll costs reported on the PPP Loan For-
giveness Application up to (but not exceeding) the
minimum amount of payroll costs, together with any
other eligible expenses reported on the PPP Loan
Forgiveness Application, sufficient to support the
amount of the PPP loan that is forgiven. It may not
treat that amount as qualified wages for purposes of
the employee retention credit.
Example 2: Employer B received a PPP loan of
$200,000. Employer B is an eligible employer and
paid $250,000 of qualified wages that would qualify
for the employee retention credit during the second
and third quarters of 2020. In order to receive for-
giveness of the PPP loan in its entirety, Employer B
was required, under the SBA rules, to report a total of
$200,000 of payroll costs and other eligible expenses
(and a minimum of $120,000 of payroll costs). Em-
ployer B submitted a PPP Loan Forgiveness Appli-
cation and reported the $250,000 of qualified wages
as payroll costs in support of forgiveness of the en-
tire PPP loan. Employer B received a decision under
section 7A(g) of the Small Business Act in the first
quarter of 2021 for forgiveness of the entire PPP loan
amount of $200,000.
Employer B is deemed to have made an election
not to take into account $200,000 of the qualified
wages for purposes of the employee retention credit,
which was the amount of qualified wages included
in the payroll costs reported on the PPP Loan For-
giveness Application up to (but not exceeding) the
minimum amount of payroll costs, together with any
other eligible expenses reported on the PPP Loan
Forgiveness Application, sufficient to support the
amount of the PPP loan that is forgiven. It may not
treat that amount as qualified wages for purposes of
the employee retention credit. Employer B is not
treated as making a deemed election with respect to
$50,000 of the qualified wages ($250,000 reported
on the PPP Loan Forgiveness Application, minus
$200,000 reported on the PPP Loan Forgiveness Ap-
plication up to the amount of the loan that is forgiv-
en), and it may treat that amount as qualified wages
for purposes of the employee retention credit.
Example 3: Employer C received a PPP loan of
$200,000. Employer C is an eligible employer and
paid $200,000 of qualified wages that would qualify
for the employee retention credit during the second
and third quarters of 2020. Employer C also paid oth-
er eligible expenses of $70,000. In order to receive
forgiveness of the PPP loan in its entirety, Employ-
er C was required, under the SBA rules, to report a
total of $200,000 of payroll costs and other eligible
expenses (and a minimum of $120,000 of payroll
costs). Employer C submitted a PPP Loan Forgive-
ness Application and reported the $200,000 of quali-
fied wages as payroll costs in support of forgiveness
of the entire PPP loan, but did not report the other
eligible expenses of $70,000. Employer C received a
decision under section 7A(g) of the Small Business
Act in the first quarter of 2021 for forgiveness of the
entire PPP loan amount of $200,000.
Employer C is deemed to have made an election
not to take into account $200,000 of qualified wages
for purposes of the employee retention credit, which
was the amount of qualified wages included in the
payroll costs reported on the PPP Loan Forgiveness
Application up to (but not exceeding) the minimum
amount of payroll costs, together with any other el-
igible expenses reported on the PPP Loan Forgive-
ness Application, sufficient to support the amount
of the PPP loan that is forgiven. Although Employer
C could have reported $70,000 of eligible expenses
(other than payroll costs) and $130,000 of payroll
costs, Employer C reported $200,000 of qualified
wages as payroll costs on the PPP Loan Forgiveness
Application. As a result, no portion of those qualified
wages reported as payroll costs may be treated as
qualified wages for purposes of the employee reten-
tion credit. Employer C cannot reduce the deemed
election by the amount of the other eligible expenses
that it could have reported on its PPP Loan Forgive-
ness Application.
Example 4: Same facts as Example 3, except
Employer C submitted a PPP Loan Forgiveness
Application and reported the $200,000 of qualified
wages as payroll costs, as well as the $70,000 of
other eligible expenses, in support of forgiveness of
the PPP loan. Employer C received a decision un-
der section 7A(g) of the Small Business Act in the
first quarter of 2021 for forgiveness of the entire PPP
loan amount of $200,000. In this case, Employer C
is deemed to have made an election not to take into
account $130,000 of qualified wages for purposes of
the employee retention credit, which was the amount
of qualified wages included in the payroll costs re-
ported on the PPP Loan Forgiveness Application up
to (but not exceeding) the minimum amount of pay-
roll costs, together with the $70,000 of other eligi-
ble expenses reported on the PPP Loan Forgiveness
Application, sufficient to support the amount of the
PPP loan that was forgiven. As a result, $70,000 of
the qualified wages reported as payroll costs may be
treated as qualified wages for purposes of the em-
ployee retention credit.
Example 5: Same facts as Example 4, except Em-
ployer C paid $90,000 of other eligible expenses, and
reported the $200,000 of qualified wages as payroll
costs, as well as the $90,000 of other eligible expens-
es, in support of forgiveness of the entire PPP loan.
In this case, Employer C is deemed to have made an
election not to take into account $120,000 of qual-
ified wages for purposes of the employee retention
credit, which was the amount of qualified wages in-
cluded in the payroll costs reported on the PPP Loan
Forgiveness Application up to (but not exceeding)
the minimum amount of payroll costs, together with
the $90,000 of other eligible expenses reported on
the PPP Loan Forgiveness Application, sufficient to
support the amount of the PPP loan that was forgiv-
en. As a result, $80,000 of the qualified wages re-
ported as payroll costs may be treated as qualified
wages for purposes of the employee retention credit.
Example 6: Employer D received a PPP loan of
$200,000. Employer D is an eligible employer and
paid $150,000 of qualified wages that would qualify
for the employee retention credit during the second
and third quarters of 2020. In addition to the quali-
fied wages, Employer D had $100,000 of other pay-
roll costs that are not qualified wages and $70,000 of
other eligible expenses.
17
In order to receive forgive-
ness of the PPP loan in its entirety, Employer D was
required, under the SBA rules, to report $200,000 of
payroll costs and other eligible expenses (and a min-
imum of $120,000 of payroll costs).
Employer D submitted a PPP Loan Forgiveness
Application and reported $130,000 of payroll costs
and $70,000 of other eligible expenses, in support
of forgiveness of the entire PPP loan. Employer
D can demonstrate that the payroll costs reported
on the PPP Loan Forgiveness Application consist
of $100,000 of payroll costs that are not qualified
wages and $30,000 of payroll costs that are quali-
fied wages. Employer D received a decision under
section 7A(g) of the Small Business Act in the first
quarter of 2021 for forgiveness of the entire PPP loan
amount of $200,000.
Employer D is deemed to have made an election
not to take into account $30,000 of qualified wages
for purposes of the employee retention credit, which
was the amount of qualified wages included in the
payroll costs reported on the PPP Loan Forgiveness
Application up to (but not exceeding) the minimum
amount of payroll costs, together with any other el-
igible expenses reported on the PPP Loan Forgive-
ness Application, sufficient to support the amount of
the PPP loan that is forgiven. It may not treat that
amount as qualified wages for purposes of the em-
ployee retention credit. Employer D is not deemed to
have made an election with respect to the $120,000
of qualified wages that are not included in the pay-
roll costs reported on the PPP Loan Forgiveness Ap-
17
Employer D may have payroll costs that are not qualified wages for various reasons. For example, Employer D may be a large eligible employer that paid wages to employees who continued
to provide services during the period of a partial suspension of business operations.

March 15, 2021 940 Bulletin No. 2021–11
plication. Accordingly, Employer D may take into
account the $120,000 of qualified wages ($150,000
of qualified wages paid minus $30,000 of qualified
wages included in the payroll costs reported on the
PPP Loan Forgiveness Application) for purposes of
the employee retention credit.
Example 7: Same facts as Example 6 except Em-
ployer D’s PPP loan is not forgiven by reason of a
decision under section 7A(g) of the Small Business
Act. Employer D may treat the full $150,000 as qual-
ified wages (the $30,000 of qualified wages included
in the payroll costs reported on the PPP Loan For-
giveness Application, plus the additional $120,000
of qualified wages not included in the payroll costs)
as qualified wages for purposes of the employee re-
tention credit.
J. Claiming the Employee Retention
Credit
Question 50: How does an eligible em-
ployer claim the employee retention credit
for qualified wages?
Answer 50: An eligible employer
claims the employee retention credit for
qualified wages by reporting its qualified
wages and the amount of the credit to
which it is entitled on the designated lines
of its federal employment tax return(s).
Employers also report any qualified sick
leave wages and qualified family leave
wages and claim the credit under sections
7001 or 7003 of the FFCRA on the des-
ignated lines on their federal employment
tax returns. For most employers, Form
941 is used to report income and social se-
curity and Medicare taxes withheld by the
employer from employee wages, as well
as the employer’s share of social security
and Medicare tax.
In anticipation of receiving the em-
ployee retention credit, eligible employers
can (1) reduce their deposits of federal
employment taxes, including withheld
taxes, that would otherwise be required
up to the amount of the anticipated credit,
and (2) request an advance of the amount
of the anticipated credit that exceeds the
reduced federal employment tax deposits
by filing Form 7200.
Example: Employer A paid $10,000 in qualified
wages (including allocable qualified health plan ex-
penses), among other wages. After deferral of the
employer’s share of social security tax under section
2302 of the CARES Act, Employer A is otherwise
required to deposit $8,000 in federal employment
taxes for all of its employees for all wage payments
made during the same quarter as the $10,000 in qual-
ified wages. Employer A did not choose to use the
relief under Notice 2020-65 to defer the employ-
ee’s share of social security tax. Employer A has no
credits under sections 7001 and 7003 of the FFCRA.
Employer A is not a tax-exempt organization eligi-
ble for the credit under section 303(d) of the Relief
Act. In anticipation of the employee retention credit,
Employer A may keep up to $5,000 of the $8,000 of
taxes Employer A was otherwise required to deposit,
and it will not owe a failure to deposit penalty for
keeping the $5,000. Employer A will later account
for the $5,000 it retained when it files Form 941 for
the quarter.
Question 51: Can an eligible employ-
er receive an advance payment of the
employee retention credit if the eligible
employer does not have sufficient federal
employment taxes set aside for deposit to
cover the amount of the anticipated credit?
Answer 51: Yes. If an eligible em-
ployer does not have sufficient federal
employment taxes set aside for deposit to
cover the amount of the anticipated credit,
the eligible employer may request an ad-
vance payment of the credit. The amount
of the advance payment will depend on
the application of other relief provisions
to the employer. For example, eligible
employers are permitted to defer the de-
posit and payment of the employer’s share
of social security tax under section 2302
of the CARES Act and the employee’s
share of social security tax under Notice
2020-65 and may do so prior to reducing
any deposits in anticipation of the credit.
Therefore, assuming an employer defers
deposit of social security tax under section
2302 of the CARES Act and Notice 2020-
65, the employer should take into account
any permitted reduction in employment
tax deposits due to (1) deferral under sec-
tion 2302 of the CARES Act, (2) deferral
under Notice 2020-65, (3) any anticipated
credits under sections 7001 and 7003 of
the FFCRA related to qualified sick leave
wages and qualified family leave wages
that the employer paid, and (4) for any
tax-exempt organization employer, any
credit under section 303(d) of the Relief
Act, before determining the amount that
it should request as an advance payment
of the employee retention credit. If the
remaining employment tax deposits set
aside are less than the anticipated credit
for the qualified wages, the eligible em-
ployer can file a Form 7200 to request an
advance payment of the credit for the re-
maining amount of the anticipated credit.
If an eligible employer fully reduces its
required deposits of federal employment
taxes otherwise due on wages paid in an-
ticipation of receiving the credit, and that
reduction covers the full amount of the
anticipated credit, it should not file a Form
7200.
Example: Employer B paid $20,000 in qualified
wages to two employees (each employee was paid
$10,000 in qualified wages) and is therefore entitled
to a credit of $10,000. Employer B is otherwise re-
quired to deposit $8,000 in federal employment taxes
on all wages paid to all employees, after deferring its
employer’s share of social security tax under section
2302 of the CARES Act. Employer B did not choose
to use the relief under Notice 2020-65 to defer the
employee’s share of social security tax. Employer
B has no credits under sections 7001 and 7003 of
the FFCRA. Employer B is not a tax-exempt orga-
nization eligible for the credit under section 303(d)
of the Relief Act. Employer B can keep the entire
$8,000 of taxes that Employer B was otherwise re-
quired to deposit without penalty as a portion of the
credit it is otherwise entitled to claim on the Form
941. Employer B may make a request for an advance
payment of the credit for the remaining $2,000 by
submitting Form 7200.
Question 52: Is there a minimum ad-
vance amount that can be claimed on a
Form 7200?
Answer 52: After July 2, 2020, the
minimum advance amount that can be
claimed on a Form 7200 is $25. A Form
7200 requesting an advance of less than
$25 will not be processed. Taxpayers can
claim credits of less than $25 on their fed-
eral employment tax returns.
Question 53: What is the last day eli-
gible employers may submit a Form 7200
requesting an advance payment of the em-
ployee retention credit for qualified wages
paid in 2020?
Answer 53: Eligible employers that
filed quarterly federal employment tax re-
turns for 2020 had the ability to submit a
Form 7200 to request an advance for each
calendar quarter before the earlier of (1)
the date the employer filed the Form 941
for the relevant quarter or (2) the due date
for filing the quarterly employment tax re-
turn, as provided below:
• For the second quarter of 2020: July
31, 2020;
• For the third quarter of 2020: Novem-
ber 2, 2020;
• For the fourth quarter of 2020: Febru-
ary 1, 2021.
At the date of publication of this no-
tice, the due dates for the quarterly feder-
al employment tax returns for 2020 have
passed, and Forms 7200 submitted after
the due dates for credits claimed in the
relevant quarters in 2020 will not be pro-
cessed.

Bulletin No. 2021–11 941 March 15, 2021
Eligible employers filing a Form 943
or Form 944 for 2020 had the ability to
submit a Form 7200 up to the earlier of
February 1, 2021 or the date they filed
the applicable employment tax return for
2020. At the date of publication of this no-
tice, the due date for Form 943 and Form
944 for 2020 has passed, and Forms 7200
submitted after February 1, 2021 for cred-
its claimed in 2020 will not be processed.
Eligible employers filing a Form CT-1
for 2020 may submit a Form 7200 up to
the earlier of March 1, 2021 or the date
they file the Form CT-1, Employer’s An-
nual Railroad Retirement Tax Return for
2020.
Question 54: Who can sign a Form
7200? Should a taxpayer submit addition-
al documents to confirm that a person is
authorized to sign a Form 7200?
Answer 54: For corporations, the pres-
ident, vice president, or other principal
officer who is duly authorized may sign
a Form 7200. For partnerships (including
an LLC treated as a partnership) or unin-
corporated organizations, a responsible
and duly authorized partner, member, or
officer having knowledge of the entity’s
affairs may sign a Form 7200. For a sin-
gle-member LLC treated as a disregarded
entity for federal income tax purposes, the
instructions provide that the owner or a
principal officer who is duly authorized
may sign the Form. For trusts or estates,
the fiduciary may sign the Form 7200. Ad-
ditionally, a Form 7200 may be signed by
a duly authorized agent of the taxpayer if
a valid power of attorney has been filed.
In many circumstances, whether the
person signing the Form 7200 is duly au-
thorized or has knowledge of the partner-
ship’s or unincorporated organization’s af-
fairs is not apparent on the Form 7200. To
help expedite and ensure proper process-
ing of Forms 7200, if a taxpayer has duly
authorized an officer, partner, or member
to sign Form 7200 (and that person is not
otherwise explicitly permitted to sign the
Form 7200 by nature of their job title),
the taxpayer should submit a copy of the
Form 2848, Power of Attorney and Dec-
laration of Representative, authorizing
the person to sign the Form 7200 with the
Form 7200.
Question 55: For eligible employers
that include multiple entities treated as a
single employer for purposes of the em-
ployee retention credit under the aggrega-
tion rules, will the individual entities sep-
arately report their credit on their federal
employment tax returns?
Answer 55: Yes. Each eligible em-
ployer will report its employee retention
credit on its federal employment tax re-
turn (or on its third-party payer’s federal
employment tax return) without regard
to its aggregation with other entities as a
single employer for purposes of the credit.
Each eligible employer’s credit will be the
amount of the credit apportioned among
the members of the aggregated group on
the basis of each member’s proportionate
share of the qualified wages giving rise to
the credit per the return period for which
the credit is claimed.
Question 56: May an eligible employ-
er elect to not take into account qualified
wages for purposes of the employee reten-
tion credit?
Answer 56: Yes. Any eligible employ-
er may elect to not take certain qualified
wages into account for purposes of the
employee retention credit by not claiming
the credit for those qualified wages on its
federal employment tax return. In addi-
tion, an eligible employer that received
a PPP loan is deemed to have made an
election to not take qualified wages into
account for purposes of the employee re-
tention credit if those qualified wages are
included in the payroll costs reported on a
PPP Loan Forgiveness Application, up to
(but not exceeding) the minimum amount
of payroll costs, together with any oth-
er eligible expenses reported on the PPP
Loan Forgiveness Application, sufficient
to support the amount of the PPP loan that
is forgiven. See Q/A–49.
Example: Employer C paid $10,000 of wages in
the second quarter of 2020. The wages are not paid
pursuant to a pre-existing vacation, sick and other
personal leave policy. The wages may be treated as
either qualified sick leave wages under section 7001
of the FFCRA or as qualified wages for purposes of
the employee retention credit. Employer C may elect
to not take into account any amount of the $10,000
of wages as qualified wages for purposes of the em-
ployee retention credit.
Question 57: May an eligible employer
that files quarterly federal employment tax
returns take into account qualified wages
paid in a past calendar quarter in which
the eligible employer may have been en-
titled to claim the credit, but elected not
to do so?
Answer 57: Yes. An eligible employ-
er may file a claim for refund or make an
interest-free adjustment by filing Form
941-X, Adjusted Employer’s Quarterly
Federal Tax Return or Claim for Refund,
for a past calendar quarter to claim the
employee retention credit to which it was
entitled on qualified wages paid in that
past calendar quarter, following the rules
and procedures for making those claims or
adjustments.
An eligible employer that received a
PPP loan and did not claim the employee
retention credit may file a Form 941-X for
the relevant calendar quarters in which the
employer paid qualified wages, but only
for qualified wages for which no deemed
election was made. See Q/A–49.
A special fourth quarter rule, provided
by section 206(e)(2) of the Relief Act, is
also available for any qualified wages paid
in the second or third quarters of 2020 that
were reported as payroll costs on a PPP
Loan Forgiveness Application if the loan
amount was not forgiven by reason of a
decision under section 7A(g) of the Small
Business Act.
Example 1: Employer D is an eligible employer
and paid qualified wages during the second quarter
of 2020 but did not claim an employee retention
credit on its second quarter 2020 Form 941. Em-
ployer D did not receive a PPP loan. If Employer D
subsequently decides to claim the credit to which it
is entitled for the second quarter of 2020, Employer
D should file a Form 941-X for the previously filed
second quarter 2020 Form 941 within the appropri-
ate timeframe to make an interest-free adjustment or
claim a refund. Employer D should not use a sub-
sequent Form 941 to claim an employee retention
credit for qualified wages paid in the second quarter
of 2020.
Example 2: Employer E received a PPP loan of
$200,000. Employer E is an eligible employer and
paid $250,000 of qualified wages that would qualify
for the employee retention credit during the second
quarter of 2020. Employer E submitted a PPP Loan
Forgiveness Application and reported the $250,000
of qualified wages as payroll costs in support of for-
giveness of the entire PPP loan. Employer E received
a decision under section 7A(g) of the Small Business
Act in the first quarter of 2021 for forgiveness of the
entire PPP loan amount of $200,000.
Employer E is not deemed to have made an elec-
tion with respect to the excess $50,000 of qualified
wages that are included in the payroll costs reported
on the PPP Loan Forgiveness Application. Accord-
ingly, Employer E may take into account the $50,000
of qualified wages for purposes of the employee
retention credit. If Employer E decides to take the
$50,000 into account to claim the credit to which it
is entitled for 2020, Employer E should file a Form
941-X for the previously filed second quarter 2020
Form 941 within the appropriate timeframe to make

March 15, 2021 942 Bulletin No. 2021–11
an interest-free adjustment or claim a refund for the
second quarter, as appropriate. Under these facts,
Employer E should not use a subsequent Form 941
to claim an employee retention credit for qualified
wages paid in the second quarter of 2020.
Example 3: Same facts as Example 2, except that
Employer E’s PPP loan is not forgiven by reason of
a decision under section 7A(g) of the Small Busi-
ness Act. If Employer E decides to claim the cred-
it to which it is entitled for 2020 with regard to the
$250,000 of qualified wages, Employer E may file a
Form 941-X for the previously filed second quarter
Form 941 within the appropriate timeframe to make
an interest-free adjustment or claim a refund for the
second quarter in 2020. Alternatively, Employer E
may use the special fourth quarter rule with respect
to the $200,000 of qualified wages included in the
payroll costs reported on the PPP Loan Forgiveness
Application since the PPP loan was not forgiven, but
not with respect to the excess $50,000 of qualified
wages even though those amounts were included in
the payroll costs reported on the PPP Loan Forgive-
ness Application.
Question 58: How does an eligible em-
ployer use the special fourth quarter rule
in section 206(e)(2) of the Relief Act?
Answer 58: If an eligible employer
received a PPP loan, and reported quali-
fied wages paid in the second and/or third
quarter of 2020 as payroll costs on its
PPP Loan Forgiveness Application, but
the loan was not forgiven by reason of a
decision under section 7A(g) of the Small
Business Act, then the eligible employer
may take the qualified wages reported as
payroll costs on its PPP Loan Forgiveness
Application into account for purposes of
the employee retention credit and claim
the employee retention credit on those
qualified wages on the fourth quarter
Form 941. An eligible employer may also
claim the employee retention credit on the
fourth quarter Form 941 with respect to
any qualified health plan expenses paid in
the second and/or third quarter of 2020,
for which the employer had not claimed
the employee retention credit.
If an eligible employer elects to use
this special fourth quarter rule, the eligi-
ble employer should add the employee
retention credit attributable to the second
and/or third quarter qualified wages and
qualified health plan expenses on line 11c
or line 13d (as relevant) of the original
fourth quarter Form 941 (along with any
other employee retention credit for quali-
fied wages paid in the fourth quarter). The
eligible employer should also:
• Include the amount of these qualified
wages paid during the second and/
or third quarter (excluding qualified
health plan expenses) on line 21 of
the original fourth quarter Form 941
(along with any qualified wages paid
in the fourth quarter);
• Enter the same amount on Worksheet
1, Step 3, line 3a;
• Include the amount of these qualified
health plan expenses from the second
and/or third quarter on line 22 of the
fourth quarter Form 941 (along with
any qualified health plan expenses for
the fourth quarter);
• Enter the same amount on Worksheet
1, Step 3, line 3b.
Eligible employers are not required to use
this special fourth quarter rule. Eligible
employers may instead choose the regular
process of making an interest-free adjust-
ment or filing a claim for refund for the
appropriate quarter to which the addition-
al employee retention credit relates using
Form 941-X for the previously filed Form
941.
K. Special Issues for Employees:
Income and Deduction
Question 59: Are qualified wages ex-
cluded from gross income as “qualified
disaster relief payments”?
Answer 59: No. Section 139 of the
Code excludes from a taxpayer’s gross
income certain payments to individuals
to reimburse or pay for expenses incurred
as a result of a qualified disaster (qualified
disaster relief payments). Although the
COVID-19 pandemic is a “qualified di-
saster” for purposes of section 139, qual-
ified wages are not excludible qualified
disaster relief payments, because qualified
wages are what an individual would oth-
erwise earn as compensation, rather than
payment or reimbursement of expenses
incurred as a result of a qualified disaster.
Therefore, qualified disaster relief pay-
ments do not include qualified wages paid
by an employer, including those that are
paid when an employee is not providing
services.
L. Special Issues for Employers:
Income and Deduction
Question 60: Does the employee re-
tention credit reduce the expenses that an
eligible employer could otherwise deduct
on its federal income tax return?
Answer 60: Yes. Section 2301(e) of the
CARES Act provides that rules similar to
section 280C(a) of the Code shall apply
for purposes of applying the employee re-
tention credit. Section 280C(a) generally
disallows a deduction for the portion of
wages or salaries paid or incurred equal to
the sum of certain credits determined for
the taxable year. Accordingly, a similar
deduction disallowance applies under sec-
tion 2301(e) of the CARES Act with re-
gard to the employee retention credit, such
that an employer’s deduction for qualified
wages, including qualified health plan ex-
penses, is reduced by the amount of the
employee retention credit. (An employer
does not, however, reduce its deduction
for the employer’s share of social security
and Medicare taxes by any portion of the
credit).
Question 61: Does an eligible employ-
er receiving an employee retention credit
for qualified wages need to include any
portion of the credit in income?
Answer 61: No. An employer receiving
a tax credit for qualified wages, including
allocable qualified health plan expenses,
does not include the credit in gross income
for federal income tax purposes. Neither
the portion of the credit that reduces the
employer’s applicable employment taxes,
nor the refundable portion of the credit, is
included in the employer’s gross income.
M. Special Issues for Employers: Use
of Third-Party Payers
Question 62: Can an eligible common
law employer that uses a third-party to re-
port and pay employment taxes to the IRS
get the employee retention credit?
Answer 62: Yes. If a common law em-
ployer is otherwise eligible to receive the
employee retention credit, it is entitled to
the credit, regardless of whether it uses
a third-party payer (such as a reporting
agent, payroll service provider, PEO,
CPEO, or 3504 agent) to report and pay its
federal employment taxes. The third-party
payer is not entitled to the employee re-
tention credit with respect to the wages it
remits on the common law employer’s be-
half (regardless of whether the third-party
is considered an “employer” for other pur-
poses of the Code). If a common law em-
ployer uses a third-party to file, report, and
pay employment taxes, different rules will

Bulletin No. 2021–11 943 March 15, 2021
apply depending on the type of third-party
payer the common law employer uses for
claiming/reporting the employee retention
credit.
If an eligible common law employer
uses a reporting agent to file its feder-
al employment tax returns, the reporting
agent will need to reflect the employee re-
tention credit on the federal employment
tax returns it files on the common law em-
ployer’s behalf.
If an eligible common law employer
uses a CPEO or a 3504 agent that received
its designation as an agent by submitting
Form 2678, Employer/Payer Appointment
of Agent, to report its federal employment
taxes on an aggregate Form 941, the CPEO
or 3504 agent will report the employee re-
tention credit on its aggregate Form 941
and Schedule R, Allocation Schedule for
Aggregate Form 941 Filers, that it already
files. An eligible common law employer
can submit its own Form 7200 to claim
the advance payment of the credit. The
eligible common law employer will need
to provide a copy of the Form 7200 to the
CPEO or 3504 agent so the CPEO or 3504
agent can properly report the employee re-
tention credit on the Form 941.
If an eligible common law employ-
er uses a non-certified PEO or other
third-party payer (other than a CPEO or
section 3504 agent that submitted Form
2678) that reports and pays the common
law employer client’s federal employment
taxes under the third-party’s Employer
Identification Number (EIN), the PEO or
other third-party payer will need to re-
port the employee retention credit on an
aggregate Form 941 and separately report
the employee retention credit allocable
to the common law employers for which
it is filing the aggregate Form 941 on an
accompanying Schedule R. The PEO or
other third-party payer does not have to
complete Schedule R with respect to any
common law employer for which it is not
claiming an employee retention credit.
The eligible common law employer will
need to provide a copy of any Form 7200
that it submitted for an advance payment
of the credit to the PEO or other third-par-
ty payer so the PEO or other third-party
payer can properly report the employee
retention credit on the Form 941. These
rules are similar to the rules that apply
with respect to the payroll tax election
available under section 41(h) of the Code
for the credit for certain research and de-
velopment expenses.
Question 63: May a payroll reporting
agent sign and submit Form 7200 on be-
half of a client employer?
Answer 63: Yes. A payroll reporting
agent may sign Form 7200 for a client
employer for which it has the authority,
via Form 8655, Reporting Agent Autho-
rization, to sign and file the federal em-
ployment tax return. The signatory must
be the Principal or Responsible Official
listed on the Reporting Agent’s e-file ap-
plication. The signatory may sign with ink
on paper or may use the alternative sig-
nature method (rubber stamp, mechanical
device, or computer software program; for
details and required documentation, see
Rev. Proc. 2005-39, 2005-28 I.R.B. 82).
Consistent with Rev. Proc. 2005-39, an al-
ternative signature must be in the form of
a facsimile signature.
The reporting agent must obtain writ-
ten authorization from the client employer
(paper, fax, or e-mail) to perform these
actions regarding the Form 7200. The re-
porting agent need not submit that autho-
rization to the IRS, but should retain it in
its files so that the reporting agent can fur-
nish it to the IRS upon request. In the case
of a client employer for which a third-par-
ty payer does not have a Reporting Agent
Authorization, the third-party payer may
complete and print the form, or it may
provide the client employer a means to
complete and print the form, but the client
employer will have to sign it.
The signatory for the reporting agent
must sign, date, and print his or her name
in the relevant boxes on Form 7200. In the
box “Printed Title,” the signatory must in-
clude the reporting agent company name
or name of business as it appeared on line
9 of the Form 8655. If the reporting agent
company name or name of business from
the Form 8655 is missing, the Form 7200
cannot be processed.
Question 64: When should the name
and EIN of a third-party payer be included
on Form 7200?
Answer 64: Common law employers
who file Form 7200 to claim an advance
payment of credits are required to in-
clude on the form the name and EIN of
the third-party payer they use to file their
federal employment tax returns (such as
the Form 941) if the third-party payer uses
its own EIN on the federal employment
tax returns. This will ensure advance pay-
ment of the credits received by the com-
mon law employer is properly reconciled
to the federal employment tax return filed
by the third-party payer for the calendar
quarter for which the advance payment of
the credits is received.
To help expedite and ensure proper
processing of Form 7200 and reconcilia-
tion of advance payment of the credits to
the federal employment tax return for the
calendar quarter, only those third-party
payers who will file a federal employment
tax return on behalf of a common law em-
ployer using the third-party payer’s name
and EIN should be listed on the Form
7200. Typically, CPEOs, PEOs, and oth-
er 3504 agents fall into this category of
third-party payers.
If a third-party payer will file the fed-
eral employment tax return on a common
law employer’s behalf using the common
law employer’s name and EIN and not the
name and EIN of the third-party payer, the
common law employer should not include
the name and EIN of the third-party pay-
er on the Form 7200. Typically, reporting
agents and payroll service providers fall
into this category of third-party payers.
Question 65: If a common law em-
ployer uses a third-party payer for only
a portion of their workforce, should the
employer list the third-party payer on the
Form 7200?
Answer 65: In some cases, a common
law employer may use the services of a
third-party payer (such as a CPEO, PEO,
or other section 3504 agent) to pay wag-
es for only a portion of its workforce. In
those circumstances, the third-party pay-
er files a federal employment tax return
for the wages it paid to the common law
employer’s employees under its name and
EIN , and the common law employer files
a federal employment tax return for wages
it paid directly to employees under its own
name and EIN.
If the common law employer is claim-
ing advance payments of credits for both
wages paid directly to employees that will
be reported on its own federal employ-
ment tax return and wages paid to other
employees by a third-party payer that will
be reported on the third-party payer’s fed-
eral employment tax return, two separate

March 15, 2021 944 Bulletin No. 2021–11
Forms 7200 should be filed: one for the
wages paid by the common law employ-
er with the name and EIN of the common
law employer, and one for the wages paid
by the third-party payer with the name and
EIN of both the common law employer
and the third-party payer.
To help expedite and ensure proper
processing of Form 7200 and reconcilia-
tion of advance payment of the credits to
the federal employment tax return when a
common law employer uses a third-par-
ty payer such as a CPEO, PEO, or other
section 3504 agent for only a portion of
its workforce, a common law employer
should include the name and EIN of the
third-party payer only on the Form 7200
for advance payment of the credits for
wages paid by the third-party payer and
reported on the third-party payer’s federal
employment tax return. The common law
employer should not include the name and
EIN of the third-party payer on the Form
7200 for advance payments of the credits
claimed for wages paid by the common
law employer and reported on the com-
mon law employer’s federal employment
tax return.
Question 66: What information must
third-party payers obtain from their client
employers to claim the employee retention
credit on their client employer’s behalf?
Answer 66: If a third-party payer (such
as a CPEO, PEO, or other section 3504
agent) is claiming the employee retention
credit on behalf of the client employer, it
must collect from the client employer any
information necessary to accurately claim
the employee retention credit on its client
employer’s behalf. This includes obtain-
ing information with respect to the client
employer’s claims for credits under sec-
tions 7001 and 7003 of the FFCRA and
under section 45S of the Code, as well as
whether the client employer has received
a Paycheck Protection Program loan au-
thorized under the CARES Act.
Question 67: May third-party payers
rely on client employer information re-
garding the employee retention credit?
Answer 67: Yes. If a third-party payer
(such as a CPEO, PEO, or other section
3504 agent) is claiming the employee
retention credit on behalf of the client
employer, the third-party payer may rely
on the client employer’s information re-
garding the client employer’s eligibility to
claim the employee retention credit.
Either the third-party payer or the cli-
ent employer may maintain all records
which substantiate the client employer’s
eligibility for the employee retention
credit. However, if the client employer
maintains the records, upon request by
the IRS, the third-party payer must obtain
from the client employer and provide to
the IRS records that substantiate the client
employer’s eligibility for the employee re-
tention credit. The client employer and the
third-party payer will each be liable for
employment taxes that are due as a result
of any improper claim of the employee re-
tention credit amounts that are improperly
claimed in accordance with their liability
under the Code and applicable regulations
for the employment taxes reported on the
federal employment tax return filed by the
third-party payer on which the credit was
claimed.
Question 68: Upon request by the IRS,
what records must third-party payers ob-
tain from their client employers to sub-
stantiate the client employer’s eligibility
for the employee retention credit?
Answer 68: If a third-party payer is
claiming the employee retention credit on
behalf of the client employer, it must, at
the IRS’s request, be able to obtain from
the client employer and provide to the IRS
records that substantiate client employer’s
eligibility for the employee retention cred-
it.
Question 69: Are client employers re-
sponsible for avoiding a “double benefit”
with respect to the employee retention
credit and the credit under section 45S of
the Code?
Answer 69: Yes. The client employer is
responsible for avoiding a “double bene-
fit” with respect to the employee retention
credit and the credit under section 45S of
the Code. The client employer cannot use
wages that were used to claim the em-
ployee retention credit and reported by the
third-party payer on the client employer’s
behalf to claim the section 45S credit on
its income tax return.
N. Substantiation Requirements
Question 70: What records should an
eligible employer maintain to substanti-
ate eligibility for the employee retention
credit?
Answer 70: An eligible employer will
adequately substantiate eligibility for the
employee retention credit if the employer
creates and maintains records that include
the following information:
• Documentation to show how the em-
ployer determined it was an eligible
employer that paid qualified wages,
including:
o any governmental order to sus-
pend the employer’s business
operations;
o any records the employer relied
upon to determine whether more
than a nominal portion of its op-
erations were suspended due to a
governmental order or whether
a governmental order had more
than a nominal effect on its busi-
ness operations;
o any records the employer used
to determine it had experienced
a significant decline in gross re-
ceipts;
o any records of which employees
received qualified wages and in
what amounts; and
o in the case of a large eligible em-
ployer, work records and docu-
mentation showing that wages
were paid for time an employee
was not providing services.
• Documentation to show how the em-
ployer determined the amount of allo-
cable qualified health plan expenses.
• Documentation related to the deter-
mination of whether the employer is a
member of an aggregated group treat-
ed as a single employer for purposes
of the employee retention credit and,
if so, how the aggregation affects the
determination and allocation of the
credit.
• Copies of any completed Forms 7200
that the employer submitted to the
IRS.
• Copies of the completed federal em-
ployment tax returns that the em-
ployer submitted to the IRS (or, for
employers that use third-party payers
to meet their employment tax obliga-
tions, records of information provided
to the third-party payer regarding the
employer’s entitlement to the credit

Bulletin No. 2021–11 945 March 15, 2021
claimed on the federal employment
tax return).
Question 71: How long should an el-
igible employer maintain records to sub-
stantiate eligibility for the employee re-
tention credit?
Answer 71: An eligible employer
should keep all records of employment
taxes for at least 4 years after the date the
tax becomes due or is paid, whichever
comes later. These should be available for
IRS review.
IV. PAPERWORK REDUCTION ACT
Any collection of information associ-
ated with this notice has been submitted
to the Office of Management and Budget
for review under OMB control number
1545-0029 in accordance with the Paper-
work Reduction Act of 1995 (44 U.S.C.
3507(d)). An agency may not conduct or
sponsor and a person is not required to re-
spond to a collection of information unless
it displays a valid OMB control number.
V. DRAFTING INFORMATION
The principal authors of this notice are
Dixie Pond and Danchai Mekadenaum-
porn, Office of the Associate Chief Coun-
sel (Employee Benefits, Exempt Organi-
zations, and Employment Taxes), although
other Treasury and IRS officials participat-
ed in its development. For further informa-
tion on the provisions of this notice, please
contact Ms. Pond or Mr. Mekadenaumporn
at 202-317-6798 (not a toll-free number).

Bulletin No. 2021–11 i March 15, 2021
Definition of Terms
Revenue rulings and revenue procedures
(hereinafter referred to as “rulings”) that
have an effect on previous rulings use the
following defined terms to describe the
effect:
Amplified describes a situation where
no change is being made in a prior pub-
lished position, but the prior position is
being extended to apply to a variation of
the fact situation set forth therein. Thus, if
an earlier ruling held that a principle ap-
plied to A, and the new ruling holds that
the same principle also applies to B, the
earlier ruling is amplified. (Compare with
modified, below).
Clarified is used in those instances
where the language in a prior ruling is be-
ing made clear because the language has
caused, or may cause, some confusion. It
is not used where a position in a prior rul-
ing is being changed.
Distinguished describes a situation
where a ruling mentions a previously pub-
lished ruling and points out an essential
difference between them.
Modified is used where the substance
of a previously published position is being
changed. Thus, if a prior ruling held that a
principle applied to A but not to B, and the
new ruling holds that it applies to both A
and B, the prior ruling is modified because
it corrects a published position. (Compare
with amplified and clarified, above).
Obsoleted describes a previously pub-
lished ruling that is not considered deter-
minative with respect to future transactions.
This term is most commonly used in a ruling
that lists previously published rulings that
are obsoleted because of changes in laws or
regulations. A ruling may also be obsoleted
because the substance has been included in
regulations subsequently adopted.
Revoked describes situations where the
position in the previously published ruling
is not correct and the correct position is
being stated in a new ruling.
Superseded describes a situation where
the new ruling does nothing more than
restate the substance and situation of a
previously published ruling (or rulings).
Thus, the term is used to republish under
the 1986 Code and regulations the same
position published under the 1939 Code
and regulations. The term is also used
when it is desired to republish in a single
ruling a series of situations, names, etc.,
that were previously published over a
period of time in separate rulings. If the
new ruling does more than restate the sub-
stance of a prior ruling, a combination of
terms is used. For example, modified and
superseded describes a situation where the
substance of a previously published ruling
is being changed in part and is continued
without change in part and it is desired to
restate the valid portion of the previous-
ly published ruling in a new ruling that is
self contained. In this case, the previously
published ruling is first modified and then,
as modified, is superseded.
Supplemented is used in situations in
which a list, such as a list of the names of
countries, is published in a ruling and that
list is expanded by adding further names
in subsequent rulings. After the original
ruling has been supplemented several
times, a new ruling may be published that
includes the list in the original ruling and
the additions, and supersedes all prior rul-
ings in the series.
Suspended is used in rare situations to
show that the previous published rulings
will not be applied pending some future
action such as the issuance of new or
amended regulations, the outcome of cas-
es in litigation, or the outcome of a Ser-
vice study.
Abbreviations
The following abbreviations in current use
and formerly used will appear in material
published in the Bulletin.
A—Individual.
Acq.—Acquiescence.
B—Individual.
BE—Beneficiary.
BK—Bank.
B.T.A.—Board of Tax Appeals.
C—Individual.
C.B.—Cumulative Bulletin.
CFR—Code of Federal Regulations.
CI—City.
COOP—Cooperative.
Ct.D.—Court Decision.
CY—County.
D—Decedent.
DC—Dummy Corporation.
DE—Donee.
Del. Order—Delegation Order.
DISC—Domestic International Sales Corporation.
DR—Donor.
E—Estate.
EE—Employee.
E.O.—Executive Order.
ER—Employer.
ERISA—Employee Retirement Income Security Act.
EX—Executor.
F—Fiduciary.
FC—Foreign Country.
FICA—Federal Insurance Contributions Act.
FISC—Foreign International Sales Company.
FPH—Foreign Personal Holding Company.
F.R.—Federal Register.
FUTA—Federal Unemployment Tax Act.
FX—Foreign corporation.
G.C.M.—Chief Counsel’s Memorandum.
GE—Grantee.
GP—General Partner.
GR—Grantor.
IC—Insurance Company.
I.R.B.—Internal Revenue Bulletin.
LE—Lessee.
LP—Limited Partner.
LR—Lessor.
M—Minor.
Nonacq.—Nonacquiescence.
O—Organization.
P—Parent Corporation.
PHC—Personal Holding Company.
PO—Possession of the U.S.
PR—Partner.
PRS—Partnership.
PTE—Prohibited Transaction Exemption.
Pub. L.—Public Law.
REIT—Real Estate Investment Trust.
Rev. Proc.—Revenue Procedure.
Rev. Rul.—Revenue Ruling.
S—Subsidiary.
S.P.R.—Statement of Procedural Rules.
Stat.—Statutes at Large.
T—Target Corporation.
T.C.—Tax Court.
T.D.—Treasury Decision.
TFE—Transferee.
TFR—Transferor.
T.I.R.—Technical Information Release.
TP—Taxpayer.
TR—Trust.
TT—Trustee.
U.S.C.—United States Code.
X—Corporation.
Y—Corporation.
Z—Corporation.

March 15, 2021 ii Bulletin No. 2021–11
Numerical Finding List
1
Bulletin 2021–11
Announcements:
2021-01, 2021-04 I.R.B. 506
2021-02, 2021-08 I.R.B. 892
2021-03, 2021-08 I.R.B. 892
2021-04, 2021-09 I.R.B. 895
Notices:
2021-01, 2021-02 I.R.B. 315
2021-03, 2021-02 I.R.B. 316
2021-04, 2021-02 I.R.B. 319
2021-02, 2021-03 I.R.B. 478
2021-05, 2021-03 I.R.B. 479
2021-07, 2021-03 I.R.B. 482
2021-09, 2021-05 I.R.B. 678
2021-06, 2021-06 I.R.B. 822
2021-08, 2021-06 I.R.B. 823
2021-11, 2021-06 I.R.B. 827
2021-12, 2021-06 I.R.B. 828
2021-13, 2021-06 I.R.B. 832
2021-10, 2021-07 I.R.B. 888
2021-15, 2021-10 I.R.B. 898
2021-16, 2021-10 I.R.B. 907
2021-18, 2021-11 I.R.B. 911
2021-19, 2021-11 I.R.B. 920
2021-20, 2021-11 I.R.B. 922
Proposed Regulations:
REG-130081-19, 2021-02 I.R.B. 321
REG-114615-16, 2021-03 I.R.B. 489
REG-111950-20, 2021-05 I.R.B. 683
REG-115057-20, 2021-05 I.R.B. 714
Revenue Procedures:
2021-01, 2020-01 I.R.B. 1
2021-02, 2020-01 I.R.B. 116
2021-03, 2020-01 I.R.B. 140
2021-04, 2020-01 I.R.B. 157
2021-05, 2020-01 I.R.B. 250
2021-07, 2020-01 I.R.B. 290
2021-09, 2020-03 I.R.B. 485
2021-08, 2020-04 I.R.B. 502
2021-10, 2020-04 I.R.B. 503
2021-12, 2020-05 I.R.B. 681
2021-11, 2020-06 I.R.B. 833
2021-15, 2020-08 I.R.B. 891
Revenue Rulings:
2021-01, 2021-02 I.R.B. 294
2021-02, 2021-04 I.R.B. 495
Treasury Decisions:
2021-03, 2021-05 I.R.B. 674
2021-04, 2021-06 I.R.B. 724
2021-05, 2021-06 I.R.B. 896
9925, 2021-02 I.R.B. 296
9940, 2021-02 I.R.B. 311
9932, 2021-03 I.R.B. 345
9939, 2021-03 I.R.B. 376
9941, 2021-03 I.R.B. 396
9942, 2021-03 I.R.B. 450
9937, 2021-04 I.R.B. 495
9936, 2021-05 I.R.B. 508
9943, 2021-05 I.R.B. 577
9945, 2021-05 I.R.B. 627
9946, 2021-06 I.R.B. 726
9947, 2021-06 I.R.B. 748
9948, 2021-06 I.R.B. 801
9938, 2021-07 I.R.B. 838
1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2020–27 through 2020–52 is in Internal Revenue Bulletin
2020–52, dated December 27, 2020.

Bulletin No. 2021–11 iii March 15, 2021
Finding List of Current Actions on
Previously Published Items
1
Bulletin 2021–11
1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2020–27 through 2020–52 is in Internal Revenue Bulletin
2020–52, dated December 27, 2020.

Internal Revenue Service
Washington, DC 20224
Official Business
Penalty for Private Use, $300
INTERNAL REVENUE BULLETIN
The Introduction at the beginning of this issue describes the purpose and content of this publication. The weekly Internal Revenue
Bulletins are available at www.irs.gov/irb/.
We Welcome Comments About the Internal Revenue Bulletin
If you have comments concerning the format or production of the Internal Revenue Bulletin or suggestions for improving it,
we would be pleased to hear from you. You can email us your suggestions or comments through the IRS Internet Home Page
www.irs.gov) or write to the Internal Revenue Service, Publishing Division, IRB Publishing Program Desk, 1111 Constitution Ave.
NW, IR-6230 Washington, DC 20224.