This form allows employers to request an advance payment on their tax credits for the following:
Qualified sick leave
Family leave wages
Employee retention credit
Instead of filing Form 7200, you should first reduce your employment tax deposits to account for the credits. You can request the amount of the credit that exceeds your reduced deposits by filing Form 7200.
Use Form 7200 to request an advance payment of the tax credits for qualified sick and qualified family leave wages and the employee retention credit that you will claim on the following federal forms.
Form 941, 941-PR, 941-SS
Form 943, 943-PR
Form 944, 944 (SP)
An Overview Of The Form
When filing, you will need all of the information from your employment tax return.
In Part I of the Form 7200, there are two boxes to fill out.
Box 1– Basic business information (business name, address, third party payer details, EIN)
Box 2– Choose the calendar quarter for which you are filing this form. This indicates when the wages were paid.
Here you will indicate which employment tax form you file and indicate whether you are a new business. You will also report the number of employees that you have.
Lines A-D report the employment tax return information, for more detailed information, follow this link.
Line 1– Total employee retention credit for the quarter
You can enter up to 50% of the wages for the current quarter, qualified wages may not exceed 50% of $10,000 ($5,000) for any employee for all the quarters. If you paid any qualified wages between March 13, 2020, and March 31, 2020, including 50% of those wages together with 50% of any qualified wages paid during the second quarter for the second-quarter total to enter on line 1.
Line 2– Total qualified sick leave wages eligible for the credit and paid this quarter
Enter the sick leave wages paid as a result of Covid-19.
Remember, the Emergency Paid Sick Leave Act (EPSLA) requires employers of 500 or less employees to provide paid sick leave to those affected by Covid-19.
Line 3- Total qualified family leave wages eligible for credit paid this quarter
Enter the wages paid for family sick leave related to Covid-19 for the current quarter.
Line 4– The sum of line 1, 2, and 3
Line 5- Enter the total amount by which you have already reduced your federal employment tax deposits for the quarter.
Line 6– The total advanced credits that you have already requested on previous filings of Form 7200 for the quarter.
Line 7– The sum of lines 5 and 6.
Line 8- Your Advance Payment Request
This amount is calculated by subtracting line 7 from line 4.
If the amount is less than zero, you are not eligible to file the IRS Form 7200.
If you have any questions about the Form 7200, please don’t hesitate to reach out to the TaxBandits support team. This is a difficult time and many businesses are experiencing stress. We are here to help your business in any way possible.