Bulletin No. 2021–19

HIGHLIGHTS

OF THIS ISSUE





Bulletin No. 2021–19

May 10, 2021

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.

INCOME TAX

Notice 2021-29, page 1149.

This notice publishes the reference price under § 45K(d)(2)

(C) of the Internal Revenue Code for calendar year 2020.

The reference price applies in determining the amount of the

enhanced oil recovery credit under § 43, the marginal well

production credit for qualified crude oil production under §

45I, and the applicable percentage under § 613A to be used

in determining percentage depletion in the case of oil and

natural gas produced from marginal properties.

Notice 2021-30, page 1149.

The notice announces that under § 613A(c)(6)(C) of the Internal Revenue Code, the applicable percentage for purposes of determining percentage depletion on marginal properties for calendar year 2021 is 15 percent. The format of

the notice is identical to the format of notices previously

published on this issue.

Rev. Proc. 2021-20, page 1150.

This revenue procedure provides a safe harbor for certain taxpayers that received a loan pursuant to the Paycheck Protection Program (PPP) and, based on guidance

Finding Lists begin on page ii.

issued by the Department of the Treasury and the Internal

Revenue Service prior to the enactment of the COVID-related Tax Relief Act of 2020, enacted as Subtitle B of

Title II of Division N of the Consolidated Appropriations

Act, 2021, Public Law 116-260, 134 Stat. 1182 (Dec.

27, 2020), did not deduct certain otherwise deductible

expenses paid or incurred during the taxpayer’s taxable

year(s) ending after March 26, 2020, and on or before

December 31, 2020 (2020 taxable year) that resulted

in, or were expected to result in, forgiveness of the loan.

Under the safe harbor, such taxpayers may elect to deduct these expenses on the taxpayer’s timely filed original Federal income tax return or information return, as

applicable, for the taxpayer’s first taxable year following

the taxpayer’s 2020 taxable year rather than filing an

amended return or administrative adjustment request for

the taxpayer’s 2020 taxable year.

Rev. Proc. 2021-23, page 1153.

This procedure modifies and supersedes specific provisions

of Rev. Proc. 2020-45 and Rev. Proc. 2020-36 for the 2021

inflation adjusted amounts relating to the Child Tax Credit, the

Earned Income Credit and the Applicable Percentage Table

for section 36B, to reflect statutory amendments made by

the American Rescue Plan Act of 2021.

The IRS Mission

Provide America’s taxpayers top-quality service by helping

them understand and meet their tax responsibilities and enforce 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 official 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 substantive 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 otherwise indicated. Procedures relating solely to matters of internal 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 rulings 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, disbarment 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.

May 10, 2021 

Bulletin No. 2021–19

Part III

2020 Section 45K(d)(2)(C)

Reference Price

Notice 2021-29

SECTION 1. PURPOSE

This notice publishes the reference

price under § 45K(d)(2)(C) of the Internal Revenue Code for calendar year

2020. The credit period for the nonconventional source production credit under

§ 45K ended on December 31, 2013, for

facilities producing coke or coke gas

(other than from petroleum based products). However, the reference price continues to apply in determining the amount

of the enhanced oil recovery credit under

§ 43, the marginal well production credit for qualified crude oil production under § 45I, and the applicable percentage

under § 613A to be used in determining

percentage depletion in the case of oil

and natural gas produced from marginal

properties.

SECTION 2. BACKGROUND

Section 45K(d)(2)(C) provides that the

term “reference price” means, with respect

to a calendar year, the Secretary’s estimate

of the annual average wellhead price per

barrel for all domestic crude oil the price

of which is not subject to regulation by the

United States.

Section 43(a) provides that, for purposes of § 38, the enhanced oil recovery

credit for any taxable year is an amount

equal to 15 percent of the taxpayer’s qualified enhanced oil recovery costs for such

taxable year.

Section 43(b)(1) provides that the

amount of enhanced oil recovery credit

for any taxable year shall be reduced by

an amount which bears the same ratio to

the amount of such credit (determined

without regard to this paragraph) as - (A)

the amount by which the reference price

for the calendar year preceding the calendar year in which the taxable year begins exceeds $28, bears to (B) $6. Section

43(b)(2) provides that the term “reference

price” means, with respect to any calendar

Bulletin No. 2021–19

year, the reference price determined for

such calendar year under § 45K(d)(2)(C).

Section 45I(a) provides that, for purposes of § 38, the marginal well production credit for any taxable year is an

amount equal to the product of the credit

amount and the qualified crude oil production and the qualified natural gas production which is attributable to the taxpayer.

Section 45I(b)(1) provides that for

crude oil production, the amount of the

marginal well production credit is $3 per

barrel of qualified crude oil production.

Section 45I(b)(2) provides that the $3

amount under § 45I(b)(1) shall be reduced

(but not below zero) by an amount which

bears the same ratio to such amount (determined without regard to this paragraph)

as – (i) the excess (if any) of the applicable reference price over $15, bears to (ii)

$3. The applicable reference price for a

taxable year is the reference price of the

calendar year preceding the calendar year

in which the taxable year begins.

Section 45I(b)(2)(C) provides that for

qualified crude oil production the term

“reference price” means, with respect to

any calendar year, the reference price determined under § 45K(d)(2)(C).

Section 613A(c)(6)(A) provides, in

general, that the allowance for depletion

under § 611 shall be computed in accordance with § 613 with respect to - (i) so

much of the taxpayer’s average daily marginal production of domestic crude oil as

does not exceed the taxpayer’s depletable

oil quantity (determined without regard

to paragraph (3)(A)(ii)), and (ii) so much

of the taxpayer’s average daily marginal production of domestic natural gas as

does not exceed the taxpayer’s depletable

natural gas quantity (determined without

regard to paragraph (3)(A)(ii)), and the

applicable percentage shall be deemed to

be specified in subsection (b) of § 613 for

purposes of subsection (a) of that section.

Section 613A(c)(6)(C) provides that

the term “applicable percentage” means

the percentage (not greater than 25 percent) equal to the sum of - (i) 15 percent,

plus (ii) 1 percentage point for each whole

dollar by which $20 exceeds the reference price for crude oil for the calendar

year preceding the calendar year in which

1149

the taxable year begins. For purposes of

this paragraph, the term “reference price”

means, with respect to any calendar year,

the reference price determined for such

calendar year under § 45K(d)(2)(C).

SECTION 3. REFERENCE PRICE

The reference price under § 45K(d)(2)

(C) for calendar year 2020 is $37.07.

SECTION 4. DRAFTING

INFORMATION

The principal author of this notice

is Christopher F. Price of the Office of

Associate Chief Counsel (Passthroughs

& Special Industries). For further information regarding this notice, contact Mr.

Price on (202) 317-6853 (not a toll-free

number).

2021 Marginal Production

Rates

Notice 2021-30

This notice announces the applicable

percentage under § 613A of the Internal

Revenue Code to be used in determining

percentage depletion for marginal properties for the 2021 calendar year.

Section 613A(c)(6)(C) defines the term

“applicable percentage” for purposes of

determining percentage depletion for oil

and gas produced from marginal properties. The applicable percentage is the

percentage (not greater than 25 percent)

equal to the sum of 15 percent, plus one

percentage point for each whole dollar

by which $20 exceeds the reference price

(determined under § 45K(d)(2)(C)) for

crude oil for the calendar year preceding

the calendar year in which the taxable year

begins. The reference price determined

under § 45K(d)(2)(C) for the 2020 calendar year is $37.07.

The following table contains the applicable percentages for marginal production

for taxable years beginning in calendar

years 1991 through 2021.

May 10, 2021

Notice 2021-30

APPLICABLE PERCENTAGE FOR MARGINAL PRODUCTION

The principal author of this notice

is Elimelech Brander of the Office of

Associate Chief Counsel (Passthroughs

and Special Industries). For further information regarding this notice contact Mr.

Brander at (202) 317-6853 (not a toll-free

number).

26 CFR 601.105: Examination of returns and

claims for refund, credit, or abatement; determination of correct tax liability. (Also: Part I. § 161)

Rev. Proc. 2021-20

SECTION 1. PURPOSE

This revenue procedure provides a

safe harbor for certain taxpayers that re-

May 10, 2021

Calendar Year

Applicable Percentage

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

15 percent

18 percent

19 percent

20 percent

21 percent

20 percent

16 percent

17 percent

24 percent

19 percent

15 percent

15 percent

15 percent

15 percent

15 percent

15 percent

15 percent

15 percent

15 percent

15 percent

15 percent

15 percent

15 percent

15 percent

15 percent

15 percent

15 percent

15 percent

15 percent

15 percent

15 percent

ceived a loan pursuant to the Paycheck

Protection Program (PPP) and, based on

guidance issued by the Department of

the Treasury (Treasury Department) and

the Internal Revenue Service (IRS) prior

to the enactment of the COVID-related

Tax Relief Act of 2020 (COVID-related Tax Relief Act), enacted as Subtitle B

of Title II of Division N of the Consolidated Appropriations Act, 2021 (Appropriations Act), Public Law 116-260, 134 Stat.

1182 (Dec. 27, 2020), did not deduct certain otherwise deductible expenses paid

or incurred during the taxpayer’s taxable

year(s) ending after March 26, 2020, and

on or before December 31, 2020 (2020

taxable year) that resulted in, or were expected to result in, forgiveness of the loan.

Under the safe harbor, such taxpayers may

1150

elect to deduct these expenses on the taxpayer’s timely filed original Federal income tax return or information return, as

applicable, for the taxpayer’s first taxable

year following the taxpayer’s 2020 taxable year rather than filing an amended return or administrative adjustment request

for the taxpayer’s 2020 taxable year.

SECTION 2. BACKGROUND

.01 PPP Prior to Enactment of the Appropriations Act.

(1) Sections 1102 and 1106 of the

Coronavirus Aid, Relief, and Economic

Security Act (CARES Act), Public Law

116-136, 134 Stat. 281, 286-93 (Mar.

27, 2020), established the PPP as a loan

program administered by the U.S. Small

Bulletin No. 2021–19

Business Administration (SBA) as part

of its “7(a) Loan Program” (15 U.S.C.

636(a)) to provide economic assistance

to small businesses nationwide adversely

impacted by the COVID–19 emergency.

See Business Loan Program Temporary

Changes; Paycheck Protection Program,

85 FR 20811 (Apr. 15, 2020). Under the

PPP as it existed prior to enactment of the

Appropriations Act, the SBA was permitted to guarantee the full principal amount

of a covered loan, defined by § 1102(a)(2)

of the CARES Act as a loan made under

the PPP during the period beginning on

February 15, 2020, and ending on December 31, 2020 (original PPP covered loan).

See § 1102(a)(2) of the CARES Act; Paycheck Protection Program Flexibility Act

of 2020, Public Law 116-142, 134 Stat.

641 (June 5, 2020).

(2) Prior to the enactment of the Appropriations Act, under § 1106(b) of the

CARES Act, an individual or entity that

was eligible to receive an original PPP

covered loan (original eligible recipient)

could receive forgiveness of the full principal amount of the loan up to an amount

equal to the following costs incurred and

payments made during the original PPP

covered period: (1) payroll costs, (2) interest on a covered mortgage obligation, (3)

any covered rent obligation payment, and

(4) any covered utility payment (original

eligible expenses).

(3) Prior to the enactment of the Appropriations Act, § 1106(i) of the CARES

Act provided that, for purposes of the Internal Revenue Code (Code), “any amount

which (but for this subsection) would be

includible in gross income of the eligible

recipient by reason of forgiveness described in subsection (b) shall be excluded from gross income.” Section 1106(i)

of the CARES Act excluded the amount

from gross income regardless of whether

the amount would be (1) income from the

discharge of indebtedness under § 61(a)

(11) of the Code, or (2) otherwise includible in gross income under § 61.

.02 Guidance Issued Prior to Enactment of the COVID-related Tax Relief

Act. On April 30, 2020, the Treasury

Department and the IRS released Notice

2020-32, 2020-21 IRB 837 (May 18,

2020), which clarified that no deduction

was allowed for an otherwise deductible

expense if the payment of the expense

Bulletin No. 2021–19

resulted in forgiveness of an original

PPP covered loan. On November 18,

2020, the Treasury Department and the

IRS released Rev. Rul. 2020-27, 202050 IRB 1552 (December 7, 2020), which

held that a taxpayer that incurred otherwise deductible expenses in its 2020 taxable year could not deduct those expenses if, at the end of the taxpayer’s 2020

taxable year, the taxpayer had a reasonable expectation of reimbursement

of the expenses in the form of covered

loan forgiveness. Also on November

18, 2020, the Treasury Department and

the IRS released Rev. Proc. 2020-51,

2020-50 IRB 1599 (December 7, 2020),

which provided a safe harbor to address

situations covered by Rev. Rul. 2020-27

when the taxpayer’s expectation of covered loan forgiveness was not realized in

a subsequent taxable year.

.03 Enactment of the COVID-related

Tax Relief Act.

(1) On December 27, 2020, the Appropriations Act was enacted. Section 304(b)

(1)(A) of the Economic Aid to Hard-Hit

Small Businesses, Nonprofits, and Venues Act (Economic Aid Act), which was

enacted as Title III of Division N of the

Appropriations Act, redesignated § 1106

of the CARES Act as § 7A of the Small

Business Act, transferred the section to

the Small Business Act (15 U.S.C. § 631

et seq.), and inserted that section so as to

appear after § 7 of the Small Business Act

(15 U.S.C. § 636)). Section 276(a)(1) of

the COVID-related Tax Relief Act amended § 7A(i) of the Small Business Act to

provide new rules regarding the Federal

income tax consequences of forgiveness

of original PPP covered loans. Specifically, § 7A(i) of the Small Business Act

provides, in relevant part, that “no amount

shall be included in the gross income of

the eligible recipient by reason of forgiveness of indebtedness [on an original PPP

covered loan],” and “no deduction shall be

denied, no tax attribute shall be reduced,

and no basis increase shall be denied, by

reason of [that] exclusion from gross income.”

(2) Rev. Rul. 2021-2, 2021-4 IRB 495

(Jan. 25, 2021), which was released on

January 6, 2021, obsoleted Notice 202032 and Rev. Rul. 2020-27 due to the enactment of § 276(a) of the COVID-related

Tax Relief Act. Rev. Rul. 2021-2 provides

1151

that, as of December 27, 2020, the conclusion stated in Notice 2020-32 and the

holding stated in Rev. Rul. 2020-27 are

no longer accurate statements of the law.

Likewise, the legal premise underlying

Rev. Proc. 2020-51 is no longer accurate

and, as of December 27, 2020, taxpayers

could not have complied with the requirements of section 3.01 or 3.02 of Rev. Proc.

2020-51.

SECTION 3. SAFE HARBOR TO

DEDUCT ORIGINAL ELIGIBLE

EXPENSES IN IMMEDIATELY

SUBSEQUENT TAXABLE YEAR

.01 Safe Harbor. Subject to the limitations described in section 3.05 of this

revenue procedure, a taxpayer may elect

to deduct otherwise deductible original eligible expenses on the taxpayer’s timely

filed, including extensions, original Federal income tax return or information return, as applicable, for the taxpayer’s immediately subsequent taxable year, rather

than on an amended return or administrative adjustment request for the taxpayer’s

2020 taxable year in which the expenses

were paid or incurred, if the taxpayer-(1) Is a “Covered Taxpayer,” as defined

in section 3.02 of this revenue procedure;

and

(2) Satisfies all of the requirements

described in section 3.04 of this revenue

procedure.

.02 Covered Taxpayer. A Covered Taxpayer is a taxpayer that satisfies all of the

following:

(1) The taxpayer received an original

PPP covered loan;

(2) The taxpayer paid or incurred original eligible expenses during the taxpayer’s 2020 taxable year;

(3) On or before December 27, 2020,

the taxpayer timely filed, including extensions, a Federal income tax return or

information return, as applicable, for the

taxpayer’s 2020 taxable year; and

(4) On the taxpayer’s Federal income

tax return or information return, as applicable, the taxpayer did not deduct the

original eligible expenses because-(a) The expenses resulted in forgiveness of the original PPP covered loan; or

(b) The taxpayer reasonably expected

at the end of the 2020 taxable year that the

expenses would result in such forgiveness.

May 10, 2021

.03 Expenses Not Covered by the Safe

Harbor. This revenue procedure does not

apply to expenses described in sections

3.03(1) or (2) of this revenue procedure.

(1) Section 304(b)(2) of the Economic Aid Act expanded the list of expenses for which an individual or entity that

received an original PPP covered loan

could receive forgiveness. See § 7A(a)

of the Small Business Act (as amended

by § 304(b)(2) of the Economic Aid Act).

However, because those new expenses

were not included as part of the original

eligible expenses, those expenses are not

eligible to be deducted through an election

by a Covered Taxpayer to apply the safe

harbor provided by section 3.01 of this

revenue procedure.

(2) Section 311(a) of the Economic Aid Act amended § 7(a) of the Small

Business Act to authorize Paycheck Protection Program Second Draw Loans

(PPP Second Draw Loans) under the

same terms, conditions, and processes

as original PPP covered loans. See § 7(a)

(37)(B) of the Small Business Act (as

added by § 311(a) of the Economic Aid

Act). PPP Second Draw Loans are not

original PPP covered loans, and therefore

eligible expenses that may result in forgiveness of such loans are not covered by

this revenue procedure.

.04 Time and Manner for Making Election to Apply Safe Harbor. To make a valid

election to apply the safe harbor provided

by section 3.01 of this revenue procedure,

a Covered Taxpayer must satisfy the following conditions:

(1) Election deadline. A Covered Taxpayer must make the election by attaching the statement described in section

3.04(2) of this revenue procedure to the

Covered Taxpayer’s timely filed, including extensions, Federal income tax return

or information return, as applicable, for

the Covered Taxpayer’s first taxable year

following the Covered Taxpayer’s 2020

taxable year in which the original eligible

expenses were paid or incurred.

(2) Requirements for statement. The

statement required by section 3.04(1)

of this revenue procedure must be titled

“Revenue Procedure 2021-20 Statement”

(and named RevProc2021-20.pdf for e-file

attachments) and include the following information:

May 10, 2021

(a) The Covered Taxpayer’s name, address, and social security number or taxpayer identification number;

(b) A statement that the Covered Taxpayer is applying the safe harbor provided

by section 3.01 of this revenue procedure;

(c) The amount and date of disbursement of the taxpayer’s original PPP covered loan; and

(d) A list, including descriptions and

amounts, of the original eligible expenses

paid or incurred by the Covered Taxpayer

during the Covered Taxpayer’s 2020 taxable year that are reported on the Federal

income tax return or information return,

as applicable, for the Covered Taxpayer’s

first taxable year following that 2020 taxable year.

.05 Safe Harbor Limitations. The safe

harbor provided by section 3.01 of this

revenue procedure does not preclude the

IRS from-(1) Examining any issues relating to

the claimed deductions for original eligible expenses, including determining

whether a taxpayer is a Covered Taxpayer

under this revenue procedure, the amount

of the deduction, and whether the Covered

Taxpayer has substantiated the deduction

claim; or

(2) Requesting additional information

or documentation verifying any amounts

described in the statement required by

section 3.04(1) of this revenue procedure.

SECTION 4. EFFECT ON OTHER

DOCUMENTS

Rev. Proc. 2020-51 is obsolete.

SECTION 5. EFFECTIVE DATE

This revenue procedure is effective for

any taxable year ending in calendar year

2020 and for the immediately subsequent

taxable year.

SECTION 6. PAPERWORK

REDUCTION ACT

.01 This revenue procedure provides

procedures by which Covered Taxpayers

may apply the safe harbor provided by

section 3.01 of this revenue procedure.

To elect to apply that safe harbor, Covered Taxpayers must file a statement in

1152

accordance with all of the requirements

described in section 3.04(2) of this revenue procedure. The collection of information will be associated with the Federal

income tax returns or information returns

to which that statement will be attached.

That collection of information has been

reviewed and approved by the Office of

Management and Budget in accordance

with the Paperwork Reduction Act (44

U.S.C. 3507(c)) under-(1) control number 1545–0123 for business filers (https://www.federalregister.

gov/documents/2018/10/09/2018-21846/

proposed-collection-comment-requestfor-forms-1065-1065-b-1066-1120-1120c-1120-f-1120-h-1120-nd); and

(2) control number 1545-074 for

individual filers (https://www.reginfo.gov/public/do/PRAViewICR?ref_

nbr=201808-1545-031).

.02 The information described in section 6.01 of this revenue procedure is

required to be collected and retained for

compliance purposes. Specifically, that

information will be used by the IRS to

(1) determine whether a Covered Taxpayer has elected to apply the safe harbor

provided by section 3.01 of this revenue

procedure, (2) determine that the amount

claimed on the Federal income tax or information return filed by the Covered Taxpayer is correct, and (3) ensure that any

future action that is inconsistent with the

election by the Covered Taxpayer to apply

the safe harbor provided by section 3.01

of this revenue procedure is properly addressed, including through the potential

application of equitable estoppel or the

doctrine of consistency.

.03 The Treasury Department and the

IRS estimate that the maximum number

of respondents under this revenue procedure would be 6,762,181. This number

was determined by examining the PPP

data for the total number of approved

original PPP covered loans. See https://

www.sba.gov/funding-programs/loans/

coronavirus-relief-options/paycheck-protection-program/ppp-data. This data is

current through March 28, 2021. Because

some taxpayers will not elect to apply the

safe harbor provided by section 3.01 of

this revenue procedure, the number of estimated respondents is on the high end of

the estimate.

Bulletin No. 2021–19

.04 The maximum estimated number

of respondents under this revenue procedure is 6,762,181. The estimated annual

burden per respondent or recordkeeper

varies between 0 and 30 minutes, depending on individual circumstances,

with an estimated average of 15 minutes.

The estimated total annual reporting and/

or recordkeeping burden is approximately 1,690,545 hours (6,762,181 respondents * 15 minutes). The estimated annual cost burden to respondents is $95 per

hour. Accordingly, the Treasury Department and the IRS expect the total annual

cost burden for the statements required

by section 3.04(1) of this revenue procedure to be approximately $160,601,799

(6,762,181 * 0.25 * $95). The estimated

annual frequency of responses is once

because that statement must be filed only

once.

SECTION 7. DRAFTING

INFORMATION

The principal authors of this revenue

procedure are Sarah Daya and Charles

Gorham of the Office of the Associate

Chief Counsel (Income Tax & Accounting). For further information regarding

this revenue procedure, please contact

Morgan Lawrence at (202) 317-7011 (not

a toll-free number).

26 CFR 601.602: Tax forms and instructions (Also:

Part l, §§ 24, 32 and 36B)

Rev. Proc. 2021-23

SECTION 1. PURPOSE

This revenue procedure supersedes

sections 3.05 (Child Tax Credit) and

3.07 (Earned Income Credit) of Rev.

Proc. 2020-45, 2020-46 I.R.B. 1016,

and section 2.01 of Rev. Proc. 2020-36,

2020-32 I.R.B. 243 (Applicable Percentage Table for 2021), to reflect statutory

amendments made by the American Rescue Plan Act of 2021, Pub. L. No. 117-2

(ARP). Rev. Proc. 2020-45 sets forth inflation-adjusted items for 2021, for var-

Bulletin No. 2021–19

ious provisions of the Internal Revenue

Code of 1986 (Code). Rev. Proc. 2020-36

updates the applicable percentage table

in § 36B(b)(3)(A)(i) of the Code (Applicable Percentage Table) used to calculate

a taxpayer’s premium tax credit (PTC)

and the required contribution percentage

used to determine whether an individual

is eligible for employer-sponsored minimum essential coverage for calendar year

2021.

SECTION 2. CHANGES

.01 Solely for taxable years beginning

in 2021, section 9611 of the ARP increases the child tax credit under § 24 of the

Code to $3,000 for qualifying children

who have attained age 6 but not 18 by the

end of the 2021 taxable year, and $3,600

for qualifying children who have not attained age 6.

.02 Solely for taxable years beginning

in 2021, section 9621 of the ARP temporarily modifies the Earned Income Credit

(EIC) under § 32 of the Code to provide

special rules, including, for example, special rules for eligible individuals with no

qualifying children and applicable phaseout amounts.

.03 For taxable years beginning in

or after 2021, section 9624 of the ARP

modifies § 32(i) of the Code to provide

that the EIC is not available for taxpayers

whose aggregate amount of disqualified

income exceeds $10,000. This amount

will be adjusted for inflation for taxable

years beginning after December 31,

2021.

.04 For taxable years beginning in 2021

and 2022, section 9661 of the ARP Act

amends the Applicable Percentage Table

in § 36B(b)(3)(A) of the Code to provide

temporary percentages. Taxpayers use the

applicable percentages in § 36B(b)(3)(A)

to determine the amount of the PTC they

may claim for a taxable year. Section 9661

does not amend the required contribution

percentage that a taxpayer uses to determine whether the taxpayer and members

of the taxpayer’s family are eligible for

employer-sponsored minimum essential

coverage. See § 36B(c)(2)(C)(i)(ll). Con-

1153

sequently, the required contribution percentage of 9.83 percent for 2021 provided

in section 2.02 of Rev. Proc. 2020-36 is

unchanged.

SECTION 3. 2021 INCREASED

REFUNDABLE CHILD

TAX CREDIT

For taxable years beginning in 2021,

the child tax credit is refundable for certain taxpayers up to $3,000 for each qualifying child age 6 or older and $3,600

for each qualifying child who has not

attained age 6. A taxpayer is eligible for

the increased refundable amount only if

the taxpayer, or the spouse of a taxpayer

filing a joint return, had a main home in

the United States for more than half of

the taxable year beginning in 2021 or was

a bona fide resident of Puerto Rico for the

taxable year beginning in 2021. For all

other taxpayers, the refundable portion

of the credit is limited to $1,400 under

§ 24(h)(5)(A).

SECTION 4. 2021 EARNED INCOME

CREDIT AS MODIFIED AND

SUPERSEDED

.01 Earned Income Credit

(1) In general. For taxable years beginning in 2021, the following amounts

are used to determine the EIC under

§ 32(b). The ”earned income amount”

is the amount of earned income at or

above which the maximum amount of

the earned income credit is allowed.

The “threshold phaseout amount” is the

amount of adjusted gross income (or, if

greater, earned income) above which the

maximum amount of the credit begins

to phase out. The ”completed phaseout

amount” is the amount of adjusted gross

income (or, if greater, earned income)

at or above which no credit is allowed.

The threshold phaseout amounts and the

completed phaseout amounts shown in

the table below for married taxpayers

filing a joint return include the increase

provided in § 32(b)(2)(B), as adjusted

for inflation for taxable years beginning

in 2021.

May 10, 2021

Item

Earned Income Amount

Maximum Amount Of Credit

Threshold Phaseout Amount (Single, Surviving Spouse, or

Head of Household)

Complete Phaseout Amount (Single, Surviving Spouse, or

Head of Household)

Threshold Phaseout Amount (Married Filing Jointly)

Completed Phaseout Amount (Married Filing Jointly)

(2) Excessive Investment Income. For

taxable years beginning in 2021, the EIC

is not allowed if the aggregate amount of

disqualified investment income exceeds

$10,000.

One

$10,640

$3,618

$19,520

This revenue procedure modifies and

supersedes sections 3.05 and 3.07 of Rev.

Proc. 2020-45, and section 2.01 of Rev.

Proc. 2020-36.

None

$9,820

$1,502

$11,610

$42,158

$47,915

$51,464

$21,430

$25,470

$48,108

$25,470

$53,865

$25,470

$57,414

$17,560

$27,380

SECTION 5. APPLICABLE

PERCENTAGE TABLE FOR 2021 AS

MODIFIED AND SUPERSEDED

.01 Applicable Percentage Table for

Household income percentage of Federal poverty line:

Less than 150%

At least 150% but less than 200%

At least 200% but less than 250%

At least 250% but less than 300%

At least 300% but less than 400%

At least 400% and higher

SECTION 6. EFFECT ON OTHER

DOCUMENTS

Number of Qualifying Children

Two

Three or More

$14,950

$14,950

$ 5,980

$6,728

$19,520

$19,520

2021. For taxable years beginning in 2021,

the Applicable Percentage for purposes of

§ 36B(b)(3)(A)(i) and § 1.36B-3(g) of the

Income Tax Regulations is:

Initial percentage

0.00%

0.00%

2.00%

4.00%

6.00%

8.50%

SECTION 7. EFFECTIVE DATE

This revenue procedure applies to taxable years beginning in 2021.

SECTION 8. DRAFTING

INFORMATION

Final percentage

0.00%

2.00%

4.00%

6.00%

8.50%

8.50%

of Associate Chief Counsel (Income Tax

& Accounting). For further information

regarding this revenue procedure, contact

Mr. Ruane at (202) 317-4718 (not a toll

free number).

The principal author of this revenue

procedure is William Ruane of the Office

May 10, 2021

1154

Bulletin No. 2021–19

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 published 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 applied 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 being made clear because the language has

caused, or may cause, some confusion. It

is not used where a position in a prior ruling is being changed.

Distinguished describes a situation

where a ruling mentions a previously published 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 published ruling that is not considered determinative 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 substance 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 previously 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 rulings 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 cases in litigation, or the outcome of a Service 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.

Bulletin No. 2021–19

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.

i

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.

May 10, 2021

Numerical Finding List1

Bulletin 2021–19

AOD:

2021-1, 2021-15 I.R.B. 985

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

2021-05, 2021-13 I.R.B. 965

2021-06, 2021-15 I.R.B. 1011

2021-07, 2021-15 I.R.B. 1061

2021-08, 2021-18 I.R.B. 1146

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

2021-17, 2021-14 I.R.B. 984

2021-21, 2021-15 I.R.B. 986

2021-22, 2021-15 I.R.B. 987

2021-23, 2021-16 I.R.B. 1113

2021-25, 2021-17 I.R.B. 1118

2021-24, 2021-18 I.R.B. 1122

2021-27, 2021-18 I.R.B. 1125

2021-28, 2021-18 I.R.B. 1130

2021-29, 2021-19 I.R.B. 1149

2021-30, 2021-19 I.R.B. 1149

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

2021-17, 2020-15 I.R.B. 991

2021-18, 2020-15 I.R.B. 1007

2021-19, 2020-15 I.R.B. 1008

2021-21, 2020-17 I.R.B. 1118

2021-20, 2020-19 I.R.B. 1150

2021-20, 2020-23 I.R.B. 1153

Revenue Rulings:

2021-01, 2021-02 I.R.B. 294

2021-02, 2021-04 I.R.B. 495

2021-03, 2021-05 I.R.B. 674

2021-04, 2021-06 I.R.B. 724

2021-05, 2021-10 I.R.B. 896

2021-06, 2021-12 I.R.B. 946

2021-07, 2021-14 I.R.B. 982

2021-08, 2021-18 I.R.B. 1120

Treasury Decisions:

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

9944, 2021-16 I.R.B. 1062

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

REG-121095-19, 2021-18 I.R.B. 1131

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.

1

May 10, 2021

ii

Bulletin No. 2021–19

Finding List of Current Actions on

Previously Published Items1

Bulletin 2021–19

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.

1

Bulletin No. 2021–19

iii

May 10, 2021

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

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