IRS Urges Caution with Paid FMLA, Sick Leave Tax Credit Paperwork

The IRS is advising employers filing for advance payment of tax credits for providing paid sick and family leave to employees related to COVID-19 to read the instructions carefully when completing the form.

Employers use Form 7200 to request advance payment of the qualified sick and family leave credits from the IRS.

Employers “should take their time when completing this form to avoid mistakes,” the IRS said in a statement.

“Mistakes can result in a processing delay, which means it may take longer to get the advance payment.”

The Families First Coronavirus Response Act requires certain employers to provide workers with paid sick leave or expanded family and medical leave for specified reasons related to COVID-19.

To avoid errors when completing Form 7200, employers should use a reputable tax preparer—such as a certified public accountant, enrolled agent, or other trained tax professional, the IRS advises.

Common Mistakes

Here are some common mistakes to avoid when completing Form 7200:

• Each Employer Identification Number should be exact—make sure to complete this box
• Check only one box for the applicable calendar quarter 
• Check only one box for Part 1, Line A 
• Check either Yes or No in Part 1, Line B
• Complete all lines in Part II using actual dollar amounts, not the number of eligible employees.
• Check the math on lines 4, 7 and 8
• Sign the form or it will be rejected