Candace J. Dixon
Form 7200 is used to request an advance payment of employer credits due to COVID-19: the credit for qualified sick and family leave wages; the employee retention credit; and the COBRA premium assistance credit. See the IRS page About Form 7200, Advance Payment of Employer Credits Due to COVID-19 for updates, and When May You File in the Instructions for Form 7200 for more information.
Employers who are filing Form 7200, Advance Payment of Employer Credits Due to COVID-19 should read the instructions carefully and take their time when completing it to avoid mistakes. Using a reputable tax preparer such as a CPA, Enrolled Agent or other knowledgeable tax professional can also help avoid errors. Mistakes can result in a processing delay, making it take longer to get the advanced payment.
Here are some things to double check when filling out Form 7200:
Missing or inaccurate employer identification number. The employer identification number (EIN) box at the top of Form 7200 must be completed. Each EIN should be exact. Make sure it's the EIN the IRS assigned to your business. Your Form 7200 can’t be processed if your EIN isn’t entered, or if it’s entered incorrectly.
Calendar quarter. Check only one box for the applicable calendar quarter. You can't file Form 7200 for 2 separate quarters using one Form 7200. If you need to file a form for 2 separate quarters, use a separate Form 7200 for each quarter.
Employment tax return type. Check only one box for Part 1, Line A for which employment tax return you file or will file for 2021. If you will file two employment tax returns for the same period, such as Form 941 and Form 943, file a separate Form 7200 for advance payments of the credit you will claim on each form.
Credits and advance requested. Complete Part II, Lines 1-9 using actual dollar amounts, not the number of eligible employees. All lines in Part II should be completed with an actual dollar amount.
Federal tax deposit reductions. Part II, Line 6, Total amount by which you have already reduced your federal employment tax deposits for these credits for this quarter, can't be a negative dollar amount. It must be a positive number. If you don’t enter this amount, or if you enter the incorrect amount, you may have an underpayment when you file your employment tax return.
Check the math. Be sure to check the math on Line 5 (Add lines 1, 2, 3, and 4), Line 7 (Total advanced credits requested on previous filings of this form for this quarter) and Line 9 (Advance requested).
Sign the form. Make sure you sign the form. Failure to sign it will result in an automatic rejection.
Authorized signer. Make sure the person signing the form is authorized to do so. Failure to use an authorized signer will result in an automatic rejection. If you have authorized an officer, partner, or member to sign, and that person isn’t otherwise explicitly permitted to sign the Form 7200 by the nature of their job title, submit a Form 2848, Power of Attorney and Declaration of Representative, authorizing the person to sign the form, along with Form 7200, to help expedite and ensure proper processing. These are the authorized signers by entity type:
Sole proprietorship - The individual who owns the business.
Corporation (including a limited liability company (LLC) treated as a corporation) - President, vice president, or other principal officer duly authorized to sign.
Partnership (including an LLC treated as a partnership) or unincorporated organization - A responsible and duly authorized partner, member, or officer having knowledge of its affairs.
Single-member LLC treated as a disregarded entity for federal income tax purposes -The owner of the LLC or a principal officer duly authorized to sign.
Trust or estate -The fiduciary.
Fax submission only. Fax your completed Form 7200 to 855-248-0552. Forms 7200 sent by mail will not be processed. Don't include anything with your fax submission except for Form 2848, Power of Attorney and Declaration of Representative if necessary; anything else won't be considered in processing your form and may delay the processing of it. Don't submit duplicates.
You can’t file a corrected or amended Form 7200; for example, if you request an advance and learn later that some of the wages weren't qualified wages or you're entitled to less of a credit on your employment tax return than you expected. If you made an error on Form 7200, it will be resolved when you claim the credit on your Form 941, 943, 944, or CT-1. Filing a corrected or amended Form 7200 may delay the processing of your original request for an advance.
Inform third-party payers or reporting agents.
If you use third-party payers or reporting agents you must tell them that you requested and received an advance payment of credit.
Third-party payers, including reporting agents, should also ask employers if they requested and received an advance payment of credit using Form 7200, Advance Payment of Employer Credits Due to COVID-19 before filing Form 941.
Resources:
About Form 7200, Advance Payment of Employer Credits Due to COVID-19 - For the latest information about developments related to Form 7200 and its instructions.
COVID-19-Related Tax Credits for Required Paid Leave Provided by Small and Midsize Businesses FAQs