19 Jan February 1 Last Day to Submit Advance Payment of Employer COVID-19 Credits
Background – In response to the COVID-19 pandemic, the federal government enacted legislation to provide relief for employers and workers. Such relief includes refundable tax credits against employment tax for required paid sick leave and the employee retention credit equal to 50% of qualified wages paid to employees after March 12, 2020, and before January 1, 2021.
Employers may claim these credits even if itexceeds their employment tax liability. If quarterly employment tax deposits that are otherwise required are less than the amount of credit for which the employer is eligible, the employer may receive the remaining credit in advance.
Form 7200 – Form 7200 is used to request an advance payment of the tax credits for qualified sick and qualified family leave wages and the employee retention credit that an employer will claim on Forms 941, 943 and 944. No employer is required to file Form 7200. The IRS advises that an employer first reduce its employment tax deposits to account for the credits and then can request the amount of the credit the exceeds the employer’s reduced deposits by filing Form 7200 or wait to get a refund when claiming the credits on the employment tax return. Forms 7200 are submitted to the IRS by fax to (855) 248-0552.
Last day to submit Form 7200 – Taxpayers filing a Form 941, 943 or 944 may submit a Form 7200 up to the earlier of February 1, 2021 or the date they file the Form 941 for the fourth quarter of 2020. Taxpayers filing a Form CT-1 (Employer’s Annual Railroad Retirement Tax Return) may submit a Form 7200 up to the earlier of March 1, 2021 or the date they file the Form CT-1 for 2020.
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