Can I request advance payment through IRS Form 7200 if the employment tax liability exceeds the credit amount?
269 views | Last modified 6/18/2020 3:23:30 AM EST

Applicable To
Form 941 Form 1099 / W-2 Form 2290

No. Only if the total credit amount exceeds the employment tax liability, employers will be allowed the full amount of this refundable credit. Also, if the quarterly employment tax deposits are less than the amount of credit for which the employer is eligible, then the remaining credit can be received in advance, using Form 7200.

For instance, say, an employer is entitled to an employee retention credit of $5,000 and was required to deposit $3,500 in employment taxes for the quarter. The employer could retain the entire $3,500 of taxes as a portion of the refundable tax credit it is entitled to and file a request for an advance payment for the remaining $1,500 ($5,000 minus $3,500) using Form 7200.

Such eligible employers are entitled to claim these refundable tax credits who have fewer than 500 employees and should provide qualified sick leave wages, and qualified family leaves wages under FFCRA.

To claim the advance payments on credits due to COVID-19, file the IRS Form 7200.

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