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Is it possible for an employer to use the FFCRA tax credit currently without waiting for the filing of the employer’s 2020 tax return?

Posted by Bonita Hatchett-Bodle

Apr 22, 2020 12:44:39 PM

Yes. The employer is able to use the FFCRA tax credit presently by reducing the current quarterly payroll tax obligation by the amount of the FFCRA tax credit, without the need to wait until the employer’s annual tax return is filed. Form 7200 is not required to be filed in order for the employer to use the tax credit now as opposed to when the employer’s annual tax filing is made.

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Topics: FFCRA tax credit, IRS Form 7200

Is it possible for an employer to use the Employee Retention Tax Credits (ERTC)  currently without waiting for the filing of the employer’s 2020 tax return?

Posted by Bonita Hatchett-Bodle

Apr 22, 2020 12:43:26 PM

Yes. The tax credit is equal to 50% of qualifying wages not in excess of $10,000 per employee for 2020, which caps the tax credit at $5,000 per employee. If an employer employs 100 or fewer employees, qualifying wages includes all wages whether or not in the form of paid leave or for the performance of services. Employers employing 100 or more employees may only include paid leave in the determination of qualifying wages for ERTC purposes. The employer is able to use the tax credit presently by reducing the current quarterly payroll tax obligation by the amount of the tax credit, without the need to wait until the employer’s annual tax return is filed. Form 7200 is not required to be filed in order for the employer to use the tax credit now as opposed to waiting until the filing of the employer’s annual return.

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Topics: ERTC tax credit, IRS Form 7200

May an employer receive a cash advance on the ERTC and the FFCRA tax credits by filing IRS Form 7200?

Posted by Bonita Hatchett-Bodle

Apr 22, 2020 12:41:48 PM

Yes. Employers may receive an advance payment of tax credits if the employer’s employment tax obligation is less than the amount of the FFCRA tax credit and the ERTC to which the employer is entitled. Eligible employers should first reduce their quarterly employment tax deposits to account for the tax credits. Thereafter, an employer may request payment of an amount determined by subtracting the employment tax liability from the available tax credits. In the event the employment tax liability is less than the tax credits, the employer may use Form 7200 to request a refund of the excess. Alternatively, the employer may wait to obtain the refund until the employer claims the tax credits on the employer’s annual tax return.

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Topics: FFCRA tax credit, advance tax credit, ERTC tax credit, IRS Form 7200

When may an employer request a cash advance on the ERTC and the FFCRA tax credits?

Posted by Bonita Hatchett-Bodle

Apr 22, 2020 12:39:27 PM

An employer may request advance payment of the tax credits anticipated for a calendar quarter, at any time before the end of the month following the quarter in which the employer paid the qualified wages. An employer may file Form 7200 several times during each calendar quarter if necessary. Form 7200 is filed by faxing the completed document to 855-248-0552.

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Topics: FFCRA tax credit, advance tax credit, ERTC tax credit, IRS Form 7200

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