What is IRS Form 7200?
230 views | Last modified 9/26/2023 8:44:14 AM EST | Added by TaxBandits Team

IRS Form 7200 (Advance Payment of Employer Credits Due to COVID-19) is used by qualifying employers to request an advance payment of the tax credits for qualified sick and qualified family leave wages, and the employee retention credit that they claim in their federal tax returns. 

The eligible tax credits for a quarter usually are greater than the amount of employment tax deposits due by the employer for the quarter. In this case, the employer can file Form 7200 to request the advance payment from the IRS of the excess credits before filing the Employment Tax Return. 

Due to the recent COVID-19 pandemic, the federal Families First Corona Relief Act (FFCRA) allows qualifying employers that are required to pay qualified sick and family leave wages during the period beginning April 1, 2020, and ending December 31, 2020 claim refundable tax credits to offset the cost of providing this leave on a dollar-for-dollar basis. 

 On the retention credit, the Coronavirus Aid, Relief and Economic Security Act (CARES Act) permit certain employers that are subject to a full or partial closure order due to COVID-19, or that experience a significant decline in gross receipts, to take a tax credit in connection with retaining employees. 

By filing Form 7200, qualifying employers can claim the advance payment on credits otherwise claim on the employment tax returns listed below. Any advance credit payments and reduced deposits have to reconciled on these forms filed for 2020. 

Form 941, Employer’s QUARTERLY Federal Tax Return.
Form 941-PR, Planilla para la Declaración Federal TRIMESTRAL del Patrono.
Form 941-SS, Employer’s QUARTERLY Federal Tax Return (American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, and the U.S. Virgin Islands).
Form 943, Employer’s Annual Federal Tax Return for Agricultural Employees.
Form 943-PR, Planilla para la Declaración Anual de la Contribución Federal del Patrono de Empleados Agrícolas.
Form 944, Employer’s ANNUAL Federal Tax Return.
Form 944(SP), Declaración Federal ANUAL de Impuestos del Patrono o Empleador.
Form CT-1, Employer's Annual Railroad Retirement Tax Return.