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7200

Use Form 7200 to request an advance payment of employer credits due to COVID-19.

Form 7200

Use Form 7200 to request advance payment of the qualified sick and family leave credits and the employee retention credit from IRS. Prior to requesting advance payment, the employer should utilize the credits by retaining employment taxes equal to the amount of qualified sick and family leave wages paid and their employee retention credit instead of depositing those amounts with the IRS. The applicable employment taxes include the employer and employee shares of Social Security and Medicare taxes and any federal income tax withheld.

Form 7200 may be filed at any time during the month following the quarter in which the qualified wages were paid. If needed, the form may be filed multiple times during a given quarter. File Form 7200 to IRS by faxing the completed form to 855-248-0552.

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Qualified Sick and Family Leave Credits

Under FFCRA, an eligible employer’s costs associated with required paid sick and family leave are offset with refundable tax credits against employment tax. Eligible employers include businesses and tax exempt organizations with fewer than 500 employees that are required to provide qualified sick and family leave wages to employees who are unable to work or telework due to circumstances related to COVID-19. Eligible employers can claim these credits based on qualifying leave wages paid between April 1, 2020 and December 31, 2020.

Employee Retention Credit

The CARES Act provides an employee retention credit to eligible employers equal to 50% of qualified wages paid to employees. Eligible employers fall into one of two categories:

1. The employer’s business is fully or partially suspended by government order due to COVID-19 during the calendar quarter.

2. The employer’s gross receipts are below 50% of the comparable quarter in 2019. Once the employer’s gross receipts increase above 80% of a comparable quarter in 2019, the employer no longer qualifies after the end of the quarter.

This refundable tax credit applies to qualified wages paid after March 12, 2020 and before January 1, 2021. If the employer had 100 or fewer employees on average in 2019, this credit is based on wages paid to all employees, regardless of whether they worked or not. If the employer had more than 100 employees on average in 2019, the credit is allowed only for wages paid to employees who did not work during the calendar quarter.

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