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Watch for These Errors When Filing for COVID-19-Related Employer Credits

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The IRS has issued Form 7200, Advance Payment of Employer Credits Due to COVID-19, that qualifying employers can file to receive advances of employment taxes that are refundable under the new tax credits created under the Families First Coronavirus Response Act and the CARES Act.

You can learn more about the new tax credits on the IRS website. This includes the employee retention credit, qualified family leave wages credit, and qualified sick leave credit.

The IRS has provided this FAQ about COVID-19-related tax credits for required paid leave. It’s also warning employers to watch out common Form 7200 errors.

When filling out Form 7200, the IRS warns employers to be sure to:

  • Fill out the correct Employer Identification Number (EIN). Don’t leave this box blank.
  • Check just one box for the applicable calendar quarter.
  • Check just one box for Part 1, Line A.
  • Complete Part 1, Line B by selecting either “Yes” or “No.”
  • Complete Part II, Lines 1-8 with the actual dollar amount, not the number of eligible employees.
  • Double-check your math on lines 4, 7, and 8.
  • Sign the form. Unsigned forms will be automatically rejected.

Please contact us online or via email at info@capincrouse.com with any questions.

Ted Batson

Ted serves as partner, tax counsel, and Professional Practice Leader – Tax. As a certified public accountant and tax counsel, Ted advises exempt organizations of all sizes on a wide range of issues. This includes consulting on tax and employee benefit related matters, representation before state and federal tax authorities, and assistance with firm audit or advisory engagements to formulate advice and counsel on important operating and tax issues. Ted also leads the firm’s tax preparation practice, including IRS Forms 990 and 990-T and related state forms.

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