What is Form 7200?
Form 7200, Advance Payment of Employer Credits Due to Covid-19, Form 7200, by the Internal Revenue Service (IRS) is a new form that serves as an application to request advance payment of employer credits due to the pandemic brought about by the coronavirus. It is ultimately designed to free up cash flow for organizations that were adversely impacted by the lockdowns and by the subsequent drop in revenues. This new form should be used from the second quarter to the fourth quarter of 2021 and should replace the earlier version of the form.
According to the IRS, employers that file forms 941, 943, 944, or CT-1 can file the 7200 form to request advance payments for the following:
- Qualified sick and family leave wages taken before October 1, 2021.
- The Employee Retention Credit for wages paid before January 1, 2022.
- COBRA Premium Assistance Credit, or subsidy, which can be claimed on employment tax returns for the second to the fourth quarter of 2021, depending on when the employer becomes entitled.
The IRS has also set some limitations in filing for form 7200. These are as follows:
- Qualified Sick and Family Leave Size Limitations, the credit for qualified sick and family leave wages can only be claimed by organizations with less than 500 full-time and part-time employees when the leave is taken.
- Employee Retention Credit Size Limitations. Advance payments are limited to employers with less than 500 full-time employees in 2021. Employers that were not yet in existence in 2019 may only claim this credit if they reached an average of less than 500 full-time employees in 2020.
How to fill out Form 7200?
The IRS warns taxpayers to check the form and make sure to fill out the updated version of IRS Form 7200 when applying for Advance Payment of Employer Credits Due to Covid-19 especially in the second quarter of 2021. Use of prior versions may result in their application being rejected.
Enter the name of the employer
Employer Identification Number (EIN)
Enter your Employer Identification Number
Enter your trade name, if there is any.
Enter the address of the organization (number, street, and apartment or suite number). On the next line, enter the city or town, state, and ZIP code. If the address is foreign, complete the next spaces; otherwise, leave it blank.
Foreign Country Name
If the address is foreign, enter the foreign country name.
If the address is foreign, enter the foreign province or county.
Foreign Postal Code
If the address is foreign, enter the foreign postal code.
Name on employment return
Enter the name on the employment tax return, if it is a third party, that will repost the wages and credits related to the advance you are requesting in Part II. if the return is filed under your name and EIN, leave this part blank.
EIN on employment tax return
Enter the EIN on the employment tax return, if it is a third party. if the return is filed under your name and EIN, leave this part blank.
Part 1: Tell Us About Your Employment Tax Return
A: Mark the appropriate box to indicate which employment tax return form you filed, or will file, in 2021. You may select:
- 941, 941-PR, or 942-SS
- 943 or 943-PR
B: Enter the total number of employees to whom you paid qualified wages eligible for the employee retention credits this quarter
C: Enter the amount reported on line 2 of your most recently filed Form 94, particularly wages reported on Schedule R, column D. Check separate instructions if a third party filed Form 94, or if you filed a different employment tax return, or have never filed one.
D: Enter the tax period of the most recently filed Form 941, or annual employment tax return.
E: Enter the average number of full-time employees you had in 2019 if you are requesting advance payment for employees retention credit. If your organization is not yet existent in 2019, enter the average number of full-time employees you had in 2020.
F: Enter the number of employees you had when qualified leave as taken during the quarter for the advance requested if you are requesting an advance payment for qualified sick or family leave wages.
G: Enter the number of individuals provided COBRA premium assistance during the quarter for the advance requested.
H: Mark the box if you are eligible for the employee retention credit solely because your business is a recovery startup business.
Part II: Enter your Credits and Advance Requested
1: Enter the total employee retention credit for the quarter. Take note that the amount should not be more than the eligible amount that can be advanced.
2: Enter the total qualified sick leave wages eligible for the credit and paid this quarter.
3: Enter the total qualified family leave wages eligible for credit and paid this quarter.
4: Enter the total COBRA premium assistance provided this quarter.
5: Enter the total of lines 1, 2,3, and 4.
6: Enter the total amount (use a positive number) you have reduced your federal employment tax deposits for these credits for this quarter.
7: Enter the total amount of advanced credits requested on previous fillings of this form from this quarter.
8: Enter the total of lines 6 and 7.
9: Enter the amount after you subtract line 8 from line 5. Do not file this form if the difference is equal to zero or less.
Mark the appropriate box to indicate if you are allowing an employee or another person to discuss this return with the IRS. You may select:
If you have selected yes, complete the next details.
Enter the name of the designee.
Enter the phone number of the designee
5-digit Personal Identification Number (PIN)
Enter a 5-digit PIN that you will use when talking to IRS
Affix your signature as a declaration that you have examined this form, and all accompanying schedules and statements, and that the information you have provided is true and correct to the best of your knowledge.
Enter the date the form was accomplished.
Enter your title in the company
Enter your name
Best Daytime Phone
Enter the best phone number to contact you during the day.
Paid Preparer Use Only
Enter the preparer’s name.
The preparer should affix his or her signature.
Enter the date the form was accomplished.
Enter the Personal Tax Identification Number of the preparer.
Mark the box if the preparer is self-employed; otherwise, fill out the details below.
Enter the name of the firm the preparer is affiliated with.
Enter the address of the firm the preparer is affiliated with.
Enter the phone number of the firm the preparer is affiliated with.
How to file Form 7200?
To file IRS Form 7200, you must fax the completed form to 866-248-0552.