The employee retention credit (ERC) was created in the Coronavirus Aid, Relief, and Economic Security (CARES) Act passed in March 2020 and later modified with subsequent legislation.
However, questions remained on several aspects of the credit. On August 4, the IRS issued Notice 2021-49 and accompanying IR-2021-165. Further, on August 10, the IRS issued Rev. Proc. 2021-33, which provides a safe harbor permitting employers to exclude certain amounts from gross receipts solely for purpose of determining eligibility for the ERC.