IRS introduced a new Form 7200.

IRS introduced a new Form 7200.

1. This new form is for immediate tax deferment. 
2. Small businesses and accountants should look into this new form and take advantage of it.
3. Small businesses may receive $5k per employee with Employee Retention Credit.

Prior tax years can be used for the losses of this year, 2020.

CARES Act – Employee Retention Credit 

1. Employers can file the new IRS form 7200 to get a credit of up to 50% of wages, maxed at $5,000 per employee. 
2. Who Qualifies?
   1. From a period of 03/12/20 to 12/31/20:
      • Any small business who is fully or partially shut down because of a COVID-19 government order 
      • Any small business with a drop in receipts or receipts of less than 50% of gross receipts.
      • There are two rules, one is for businesses with less than or equal to 100 full time employees, and the credit applies to all qualified wages of up to 50%, including health insurance. 
3. When To Apply:
   1. When a business files their 941, 943, 944 or CT-1 quarterly reports at the end of the quarter, they would file the 7200 at the same time to apply for this credit. 
   2. Small businesses who do not qualify for PPP loan can still apply for and receive tax relief.

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