# Bulletin No. 2021–19

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URL: https://www.frixlaw.com/law-library/documents/agency%3Airs%3A0174828fa1bc6ce2

## Record

- **Collection:** Agency decision
- **Document type:** Agency decision

## Text

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

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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
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.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Airs%3A0174828fa1bc6ce2. Public record. Not legal advice.