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Note: The form, instructions, or publication you are looking for 
 begins after this coversheet. 

 Please review the updated information below. 

 Early Termination of the Employee Retention Credit for Most 
                         Employers 

The Infrastructure Investment and Jobs Act amends section 3134 of the Internal Revenue 
Code to limit the availability of the employee retention credit in the fourth quarter of 2021 to 
taxpayers that are recovery startup businesses, as defined in section 3134(c)(5). Therefore, 
taxpayers that are not recovery startup businesses are not eligible for the employee 
retention credit for wages paid after September 30, 2021.  

Some taxpayers that are no longer eligible to claim the employee retention credit for wages 
paid after September 30, 2021 may have already reduced their employment tax deposits in 
anticipation of claiming the employee retention credit for the fourth quarter of 2021. These 
taxpayers should monitor guidance issued by the IRS to learn if they must take any action 
regarding these amounts. 

Some taxpayers may have already submitted Form 7200 to request an advance payment of 
the employee retention credit for the fourth quarter of 2021. If the Form 7200 hasn’t been 
processed, the IRS will use the taxpayer’s indication of whether it is a recovery startup 
business (Form 7200, Part 1, line H) as part of its determination regarding whether the 
Form 7200 claiming the employee retention credit in the fourth quarter of 2021 should be 
accepted or rejected.  If an advance payment of the employee retention credit for the fourth 
quarter of 2021 was already sent to a taxpayer that is no longer eligible to claim the 
employee retention credit for the fourth quarter of 2021 because it is not a recovery startup 
business, the taxpayer will still include that advance payment on the appropriate line of its 
employment tax return (for example, Form 941, Part 1, line 13h) for the quarter. In this case, 
the taxpayer may have a balance due when it files that employment tax return. Taxpayers 
should continue to monitor guidance issued by the IRS to learn if they should take any 
additional action regarding these amounts.

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Department of the Treasury
Internal Revenue Service
Instructions for Form 7200

(Rev. April 2021)
Advance Payment of Employer Credits Due to COVID-19

Section references are to the Internal Revenue Code Paycheck Protection Program (PPP) that is forgiven or
unless otherwise noted. amounts used as payroll costs for shuttered operator
grants and restaurant revitalization grants. See the
Future Developments instructions for line 1, later.
For the latest information about developments related to See When May You File, later, for information on the
Form 7200 and its instructions, such as legislation deadlines for filing Form 7200 to request an advance of
enacted after they were published, go to IRS.gov/ the employee retention credit. See Notice 2021-23,
Form7200. 2021-16 I.R.B. 1113, available at IRS.gov/irb/
At the time Form 7200 and these instructions went 2021-16_IRB#NOT-2021-23, for guidance on the
employee retention credit provided under section 2301 of
CAUTION leave wages is available for leave taken before
! to print, the credit for qualified sick and family the CARES Act, as amended by section 207 of the
October 1, 2021, and the employee retention credit is Taxpayer Certainty and Disaster Tax Relief Act of 2020,
available for wages paid before January 1, 2022. COBRA for qualified wages paid after December 31, 2020, and
premium assistance is only available for periods of before July 1, 2021. The IRS expects to issue guidance
coverage beginning on or after April 1, 2021, through about the employee retention credit provided under the
periods of coverage beginning on or before September ARP for wages paid after June 30, 2021, and before
30, 2021. However, the COBRA premium assistance January 1, 2022, later this year. A link to any new
credit could be claimed on employment tax returns for the guidance issued will be posted at IRS.gov/ERC.
second, third, or fourth quarter of 2021, depending on The COVID-19 related credit for qualified sick and
when the employer (or other person) becomes entitled to family leave wages has been extended and amen-
the credit. If any of these credits are extended, and ded. The ARP adds new sections 3131, 3132, and 3133
advance payments are allowed for future quarters, an to the Internal Revenue Code to provide credits for
update will be posted under Recent Developments at qualified sick and family leave wages similar to the credits
IRS.gov/Form7200. See When May You File, later, for that were previously enacted under the Families First
more information. Coronavirus Response Act (FFCRA) and amended and
extended by the COVID-related Tax Relief Act of 2020.
The credits under sections 3131 and 3132 are available
General Instructions for qualified wages paid for leave taken after March 31,
2021, and before October 1, 2021. Below are the major
What’s New changes made under the ARP.
The COVID-19 related employee retention credit has • The ARP keeps the daily wage thresholds that
been extended and amended. The American Rescue previously existed. The aggregate cap on qualified sick
Plan Act of 2021 (the ARP) adds new section 3134 to the leave wages remains at 80 hours (10 days), but the
Internal Revenue Code to provide an employee retention limitation on the number of days resets on April 1, 2021.
credit similar to the credit that was previously enacted The aggregate cap on qualified family leave wages
under the Coronavirus Aid, Relief, and Economic Security increases to $12,000 from the previous cap of $10,000,
(CARES) Act and amended and extended by the and the aggregate cap resets on April 1, 2021.
Taxpayer Certainty and Disaster Tax Relief Act of 2020. • The ARP also created a new category of leave under
The employee retention credit is available for qualified the Emergency Paid Sick Leave Act (EPSLA) and the
wages paid before January 1, 2022. Generally, the rules Expanded Family and Medical Leave Act (Expanded
for the employee retention credit for the second quarter of FMLA) to include the time the employee is seeking or
2021 and third and fourth quarters of 2021 are awaiting the results of a diagnostic test for, or a medical
substantially similar. However, the following changes diagnosis of, COVID-19 (and the employee has been
under the ARP begin July 1, 2021, and are applicable for exposed to COVID-19 or the employee’s employer has
only the third and fourth quarters of 2021. requested such test or diagnosis), or the employee is
• The ARP creates a new category of an eligible obtaining immunizations related to COVID-19 or
employer called a recovery startup business. For a recovering from an injury, disability, illness, or condition
definition of recovery startup business, see the related to such immunization. Additionally, employers may
instructions for line H, later. provide employees with paid family leave if the employee
• Qualified wages for the employee retention credit under is unable to work due to any of the conditions for which
section 3134 don't include wages taken into account for eligible employers may provide paid sick leave under the
credits under sections 41, 45A, 45P, 45S, 51, 1396, 3131, EPSLA.
and 3132. Additionally, qualified wages for the employee • The credits are still increased by the qualified health
retention credit can't include amounts used as payroll plan expenses allocable to the qualified sick and family
costs for a Small Business Interruption Loan under the leave wages, but the credits are now also increased,
subject to the credit limitations, by certain amounts paid

May 18, 2021 Cat. No. 74321S

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under collective bargaining agreements that are properly Reminders
allocable to the qualified leave wages. The collectively
bargained contributions paid by an eligible employer that Reducing deposits for advanceable employment tax
are eligible for the credit are collectively bargained credits. When employers pay their employees, they’re
defined benefit pension plan contributions and collectively required to withhold federal income tax and the employee
bargained apprenticeship program contributions that are share of social security and Medicare taxes. Employers
properly allocable to qualified leave wages. are required to deposit these taxes, along with their
• Under section 3133, the credits are increased by the employer share of social security and Medicare taxes,
amount of the employer share of social security tax and with the IRS and file employment tax returns (Form(s)
Medicare tax on the qualified sick and family leave wages. 941, 943, 944, or CT-1) with the IRS. Eligible employers
• Governmental employers, except for the federal who pay qualified sick and family leave wages, pay
government (and its agencies and instrumentalities, qualified wages eligible for the employee retention credit,
except for those that are described in section 501(c)(1)), and/or provide COBRA premium assistance to help
may now claim the credits. assistance eligible individuals continue their health
• Generally, the same wages can’t be used for both the benefits should retain an amount of the employment taxes
credit for qualified sick leave wages and the credit for equal to their anticipated credit for qualified sick and
family leave wages. Additionally, none of the wages used family leave wages, employee retention credit, and/or
for these leave credits can be used for the employee COBRA premium assistance credit rather than depositing
retention credit or certain other credits. The credit for these amounts with the IRS. The employment taxes that
qualified sick leave wages and qualified family leave are available for the credits include withheld federal
wages doesn't apply to wages taken into account as income tax, the employee share of social security and
payroll costs for a Small Business Interruption Loan under Medicare taxes, and the employer share of social security
the PPP that is forgiven or in connection with shuttered and Medicare taxes with respect to all employees. If there
operator grants and restaurant revitalization grants. See aren’t sufficient employment taxes to retain to cover your
the instructions for line 2 and line 3, later, for more anticipated credits, employers can file Form 7200 to
information. request an advance payment from the IRS subject to
• The credit for qualified sick leave wages and qualified limitations discussed later in these instructions. Don't
family leave wages isn’t allowed in a quarter in which the reduce your deposits and request advance credit
employer provides the leave in a manner that payments for the same expected credit. You will need to
discriminates in favor of highly compensated employees, reconcile your advance credit payments and reduced
full-time employees, or employees on the basis of deposits on your employment tax return. For more
employment tenure. See Highly compensated employee, information, see Notice 2021-24, 2021-18 I.R.B. 1122,
later, for the definition. available at IRS.gov/irb/2021-18_IRB#NOT-2021-24.
See When May You File, later, for information on the Examples. If an employer is entitled to a credit of
deadlines for filing Form 7200 to request an advance of $5,000 for qualified sick leave wages, certain related
the credit for qualified sick and family leave wages. For health plan expenses, and the employer share of social
more information about the credit for qualified sick and security and Medicare tax on the leave wages and is
family leave wages, go to IRS.gov/PLC. otherwise required to deposit $8,000 in employment
taxes, the employer could reduce its federal employment
New credit and advance for COBRA premium assis- tax deposits by $5,000. The employer would only be
tance payments. Section 9501 of the ARP provides for required to deposit the remaining $3,000 on its next
COBRA premium assistance in the form of a full reduction regular deposit date. If an employer is entitled to an
in the premium otherwise payable by certain individuals employee retention credit of $10,000 and was required to
and their families who elect COBRA continuation deposit $8,000 in employment taxes, the employer could
coverage due to a loss of coverage as the result of a retain the entire $8,000 of taxes as a portion of the
reduction in hours or an involuntary termination of refundable tax credit it is entitled to and file a request for
employment (assistance eligible individuals). This an advance payment for the remaining $2,000, subject to
COBRA premium assistance is available for periods of the limitations described in the next paragraph, using
coverage beginning on or after April 1, 2021, through Form 7200.
periods of coverage beginning on or before September
30, 2021. Amount of advance for the employee retention credit
is limited. For the employee retention credit, the amount
Section 9501(b) of the ARP adds a new section 6432
of the advance of the anticipated credit may not exceed
that allows a credit (COBRA premium assistance credit)
70% of the average quarterly wages paid by the employer
against the employer share of Medicare tax for each
in calendar year 2019. The advance may also be further
calendar quarter in an amount equal to the premiums not
limited if the employer qualifies for the employee retention
paid by assistance eligible individuals for COBRA
credit solely because the business is a recovery startup
continuation coverage by reason of section 9501(a)(1) of
business. See the instructions for line E line H, , and line 1
the ARP. For more information, see the instructions for
for more information. Also, only small employers (those
line G and line 4, later. See When May You File, later, for
that averaged 500 or fewer full-time employees in 2019)
information on the deadlines for filing Form 7200 to
may request an advance of the employee retention credit.
request an advance of the COBRA premium assistance
See Certain advances are limited to small employers,
credit.
later.

-2- Instructions for Form 7200 (Rev. 4-2021)

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Purpose of Form 7200 specific lines on which the credits and advances are
reported.
These instructions give you some background information
about Form 7200. They tell you who may file Form 7200,
when and how to file it, and how to complete it line by line. Who May File Form 7200?
For the latest information about coronavirus (COVID-19) Generally, employers that file Form(s) 941, 943, 944, or
tax relief, go to IRS.gov/Coronavirus. For information CT-1 may file Form 7200 to request an advance payment
about the credit for qualified sick and family leave wages, of the tax credit for qualified sick and family leave wages,
go to IRS.gov/PLC. See Notice 2021-23 for guidance on the employee retention credit, and/or the COBRA
the employee retention credit for qualified wages paid premium assistance credit. You will need to reconcile any
after December 31, 2020, and before July 1, 2021. The advance credit payments and reduced deposits on your
IRS expects to issue guidance about the employee employment tax return(s) that you will file for 2021. No
retention credit for wages paid after June 30, 2021, and employer is required to file Form 7200. As described
before January 1, 2022, later this year. A link to any new earlier under Reminders, instead of filing Form 7200, you
guidance issued will be posted at IRS.gov/ERC. If you should first reduce your employment tax deposits to
want more in-depth information about payroll tax topics, account for the credits. You can request an advance of
see Pub. 15 or go to IRS.gov/EmploymentTaxes. the credit that exceeds your reduced deposits by filing
Form 7200 or you can wait to get any refund when you
Use Form 7200 to request an advance payment of the claim the credits on your employment tax return.
tax credits for qualified sick and qualified family leave
New businesses formed after December 31,
wages, the employee retention credit, and the COBRA
TIP 2020, can't file Form 7200 to apply for an advance
premium assistance credit that you will claim on the
payment of the employee retention credit.
following forms.
• Form 941, Employer’s QUARTERLY Federal Tax Certain advances are limited to small employers. For
Return. private employers, the credit for qualified sick and family
• Form 941-PR, Planilla para la Declaración Federal leave wages may be claimed by employers that employ
TRIMESTRAL del Patrono. fewer than 500 full-time and part-time employees at the
• Form 941-SS, Employer’s QUARTERLY Federal Tax time the leave is taken; see IRS.gov/PLC and guidance
Return (American Samoa, Guam, the Commonwealth of from the Department of Labor at DOL.gov/agencies/whd/
the Northern Mariana Islands, and the U.S. Virgin pandemic for more information. Advance payments of the
Islands). employee retention credit for 2021 are limited to small
• Form 943, Employer’s Annual Federal Tax Return for employers that averaged 500 or fewer full-time employees
Agricultural Employees. in 2019. For employers that weren't in existence in 2019,
• Form 943-PR, Planilla para la Declaración Anual de la advance payments are limited to small employers that
Contribución Federal del Patrono de Empleados averaged 500 or fewer full-time employees in 2020. For
Agrícolas. more information, see the instructions for line E line H, ,
• Form 944, Employer’s ANNUAL Federal Tax Return. and line 1, later.
• Form CT-1, Employer's Annual Railroad Retirement
Tax Return. Employment Tax Return Filed by a Third-Party
You can’t request an advance payment of the Payer
! credits for sick and family leave for self-employed If you’re the common-law employer of the individuals that
CAUTION individuals. Don’t use Form 7200 for those credits. are paid qualified sick or family leave wages, paid wages
qualifying for the employee retention credit, and/or
All references to Form 941 in these instructions also provided COBRA premium assistance, you’re entitled to
apply to Forms 941-SS and 941-PR. All references to the credit for the sick and family leave wages, the
Form 943 in these instructions also apply to Form 943-PR. employee retention credit, and/or the COBRA premium
assistance credit, regardless of whether you use a
Except where specifically indicated, all references to third-party payer (such as a professional employer
"wages" in these instructions also mean "compensation" organization (PEO), certified professional employer
under the Railroad Retirement Tax Act (RRTA). organization (CPEO), or section 3504 agent) to report and
When you file Form 7200, you're only requesting pay your federal employment taxes. The third-party payer
TIP an advance of the credits that you will claim on isn’t entitled to the credits with respect to the wages and
your employment tax return; you're not actually taxes it remits on your behalf, or the COBRA premium
claiming the credits. The credits are claimed when you file assistance it remits on your behalf (regardless of whether
Form 941 for the quarter, or Form 943, 944, or CT-1 for the third party is considered an “employer” for other
the year. You claim the credits by reporting the amount of purposes). With respect to the COBRA premium
the credit on specific lines on your employment tax return. assistance credit, the preceding sentences assume the
For example, on Form 941 for the second quarter of 2021, common-law employer is the person to whom premiums
the credits are reported on lines 11b, 11c, 11d, 11e, 13c, are payable for purposes of the credit. If the insurer or
13d, 13e, and 13f. You must report the total amount of the multiemployer plan is the person to whom premiums are
advances you received from filing Form 7200 for the payable, the references to employer in this paragraph
quarter on Form 941, line 13h. If you file Form 943, 944, or should be read to refer to the insurer or multiemployer
CT-1, see the form that you file and its instructions for the plan, as applicable. For an exception to the rule that the

Instructions for Form 7200 (Rev. 4-2021) -3-

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common-law employer is entitled to the COBRA premium          In this case, a third-party payer's clients aren't eligible for 
assistance credit even if the common-law employer uses        the COBRA premium assistance credit or an advance 
a third-party payer, see Third-party payer treated as the     payment of the COBRA premium assistance credit.
person to whom premiums are payable, later.                       If you're a third-party payer that is considered the 
  Section 3504 agents and CPEOs must complete                 person to whom premiums are payable, write "TPP Plan 
Schedule R (Form 941), Allocation Schedule for                Administrator" above the dotted line to the left of the line 4 
Aggregate Form 941 Filers, when filing an aggregate           entry box.
Form 941; or Schedule R (Form 943), Allocation Schedule           Third-party payers that are considered the person to 
for Aggregate Form 943 Filers, when filing an aggregate       whom premiums are payable may, in anticipation of 
Form 943. If you’re a client of a section 3504 agent or       receiving the COBRA premium assistance credit, reduce 
CPEO, and you're otherwise entitled to request the            the deposits of federal employment taxes relating to their 
advance payment of the credits on Form 7200, you may          own employees (that is, those employees for whom they 
still request the advance even though your employment         are filing as the common-law employer, rather than as a 
tax return information is included on the aggregate           third-party payer) on the day they become eligible for the 
employment tax return filed by the section 3504 agent or      credit. If the anticipated credit exceeds the available 
CPEO. However, you will need to provide your section          reduction of these deposits, the third-party payer may file 
3504 agent or CPEO with copies of the Form(s) 7200 that       Form 7200 after the payroll period in which the third-party 
you submitted so they can reconcile the credits on the        payer becomes entitled to the credit.
aggregate employment tax return.
                                                              Correcting or Amending Form 7200
  If you’re a client of a non-certified PEO (a PEO that 
pays wages to individuals as part of the services provided    You can’t file a corrected or amended Form 7200. For 
to a client pursuant to a service agreement, such as          example, if you requested an advance and then later learn 
collecting, reporting, and/or paying or depositing            that some of the wages weren't qualified wages or you're 
employment taxes), and you’re otherwise entitled to           entitled to less of a credit on your employment tax return 
request the advance payment of the credits on Form            than you expected, you can't file a corrected or amended 
7200, you may still request the advance even though your      Form 7200. If you made an error on Form 7200, the error 
employment tax return information is included on the          will be resolved when you claim the credit on your Form 
aggregate employment tax return filed by the non-certified    941, 943, 944, or CT-1. Filing a corrected or amended 
PEO. You will need to provide your non-certified PEO with     Form 7200 may delay the processing of your original 
copies of the Form(s) 7200 that you submitted so they can     request for an advance.

reconcile the credits on the aggregate employment tax         When May You File?
return using Schedule R (Form 941).
                                                              The employer tax credits for qualified sick leave wages 
    The common-law employer is responsible for the            and qualified family leave wages apply to those wages 
TIP accounting of the employee retention credit and           paid for the period of leave taken from April 1, 2021, 
    for any liability for improperly claimed credits.         through September 30, 2021.
CPEOs and other third-party payers must accurately 
                                                                  For 2021, the employee retention credit applies to 
report the employee retention credits based on the 
                                                              qualified wages paid after December 31, 2020, and before 
information provided by the common-law employer. The 
                                                              January 1, 2022. Generally, you're eligible for the credit 
CPEO or other third-party payer will be liable for 
                                                              during the period in which you experience a suspension of 
employment taxes, in accord with its normal liability, that 
                                                              business operations due to a governmental order in a 
are due as a result of any improperly claimed credits.
                                                              calendar quarter or in a calendar quarter in which you 
  For more information about third-party payers filing        experience a decline in gross receipts. A decline in gross 
Form 7200, see the frequently asked questions at              receipts in a calendar quarter occurs when your gross 
IRS.gov/PLC. For information on the different types of        receipts for the calendar quarter are less than 80% of the 
third-party payer arrangements, see section 16 of Pub. 15.    gross receipts for the same calendar quarter in calendar 
                                                              year 2019. However, see the instructions for line H and 
Third-party payer treated as the person to whom pre-          line 1, later, for an exception for a recovery startup 
miums are payable.     Under an exception to the rule that    business.
the common-law employer is entitled to the COBRA 
premium assistance credit even if the common-law                  The COBRA premium assistance credit is available for 
employer uses a third-party payer, a third-party payer is     premium assistance provided for periods of coverage 
entitled to the credit if it is treated as the person to whom beginning on or after April 1, 2021, through periods of 
premiums are payable. A third-party payer is treated as       coverage beginning on or before September 30, 2021. For 
the person to whom premiums are payable if it:                more information about this credit, see the instructions for 
• Maintains the group health plan;                            line 4, later.
• Is considered the sponsor of the group health plan and          The last day to file Form 7200 to request an advance 
is subject to the applicable DOL COBRA guidance,              payment for the second quarter of 2021 is August 2, 2021. 
including providing the COBRA election notices to             The last day to file Form 7200 to request an advance 
qualified beneficiaries; and                                  payment for the third quarter of 2021 is November 1, 
• Would have received the COBRA premium payments              2021. The last day to file Form 7200 to request an 
directly from the assistance eligible individuals were it not advance payment for the fourth quarter of 2021 is January 
for the COBRA premium assistance.                             31, 2022. The last date to file Form 7200 is the same 

                                                              -4-           Instructions for Form 7200 (Rev. 4-2021)

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whether you file quarterly Form 941, or annual Form 943, individuals; proof of each individual's eligibility for COBRA
944, or CT-1. You may not file Form 7200 for a quarter premium assistance and the election of COBRA
after you file Form 941 for the same quarter. If you file coverage.
Form 7200 after the end of the quarter, it's possible that it • Amount of all advances received and copies of
may not be processed prior to the processing of the filed completed Form(s) 7200 you filed with the IRS.
Form 941 for the quarter. Advance payment requests on • If you use more than one third-party payer or also file
Form 7200 for a quarter won't be paid after your Form 941 your own return for some wages, documentation to show
has been processed for that quarter. When the IRS which wages related to the credits were paid by which
processes Form 941, we will correct the amount reported third-party payer or you.
on Form 941, line 13h, to match the amount of advance
payments issued or contact you to reconcile the
difference before we finish processing Form 941. If Specific Instructions
necessary, you can file Form 7200 several times during
each quarter for subsequent payments that are eligible for Enter Your Business Information
credits; however, see Correcting or Amending Form 7200, Enter your name, trade name (if any), employer
earlier. Don't file the form to request an advance payment identification number (EIN), and address at the top of
for any anticipated credit for which you already reduced Form 7200. Make sure that they exactly match the name
your deposits. of your business and the EIN that the IRS assigned to
your business. If you use a tax preparer to fill out Form
How To File 7200, make sure the preparer shows your business name
Fax your completed form to 855-248-0552. exactly as it appeared when you applied for your EIN.
Your Form 7200 can’t be processed if your EIN isn’t
Don't include anything other than Form 7200 with entered or if it’s entered incorrectly. Leave the “Trade
! your submission. If you include other information, name” line blank if it is the same as your “Name.” If mail
CAUTION such as tax returns, letters, requests for phone
isn't delivered to your street address, enter your P.O. box
calls, etc., they won't be considered in processing your number. Don't abbreviate the name of a foreign country.
Form 7200 and they may delay the processing of your
form. However, see Sign Here (Approved Roles), later, for Using an address on Form 7200 that is different
an exception. Don’t submit a duplicate Form 7200. ! from the address we have for you in our records
CAUTION will delay the processing of your Form 7200. Form
8822-B is used to notify the IRS of a change of business
Recordkeeping
address. Enter the address at the top of Form 7200 where
Keep all records of the relevant employment taxes for at you want the IRS to mail the advance payment. If your
least 6 years after the date the tax becomes due or is Form 7200 specifies an address that is different from the
paid, whichever is later. You may need to maintain these last known address we have in our records, we will need
records for a longer period if you consent to an extended to contact you by letter (at the last known address
period for assessment by the IRS. These records should according to our records) to confirm your address and
be available for IRS review. Your records should include whether the advance refund should be mailed to the
the following information. address listed on Form 7200. We will not process your
• Documentation to show how you figured the amount of Form 7200 until we hear back from you.
qualified sick and family leave wages eligible for the
credit. Third-party payer information. In the entry spaces
• Documentation to show any collectively bargained immediately above Part I on Form 7200, enter, if
contributions for sick and family leave to a defined benefit applicable, the name and EIN of the third-party payer that
pension plan and/or apprenticeship program. you use, or will use, to file your employment tax returns
• Documentation to show how you figured the amount of (such as the Form 941) if the third-party payer uses its
the employee retention credit. own EIN on your federal employment tax returns. This will
• Documentation to show how you figured the amount of ensure advance payment of the credits you receive are
qualified health plan expenses included in the credits. properly reconciled to the federal employment tax return
• Documentation to show how you determined that the filed by the third-party payer for the calendar quarter for
employees were qualified to receive sick and family leave which the advance payment of the credits is received.
wages. See IRS.gov/PLC for specific records you should
To help expedite and ensure proper processing of
maintain to substantiate eligibility for the credit.
Form 7200 and reconciliation of advance payment of the
• Documentation to show your eligibility for the employee
credits to the federal employment tax return for the
retention credit based on suspension of business
calendar quarter, only those third-party payers who will file
operations or a decline in gross receipts, or, if applicable,
a federal employment tax return on your behalf using the
documentation to show your eligibility as a recovery
third-party payer's name and EIN should be listed on the
startup business.
Form 7200. Typically, CPEOs, PEOs, and other section
• Documentation to show your eligibility for the COBRA
3504 agents fall into this category of third-party payers.
premium assistance credit, including a copy of invoice or
other supporting statement from the insurance carrier and If a third party will file the federal employment tax return
proof of timely payment of the full premium to the on your behalf using your name and EIN and not the name
insurance carrier under COBRA or, in the case of a and EIN of the third party, don't include the name and EIN
self-insured plan, proof of the premium amount and proof of the third party. Typically, reporting agents and payroll
of the coverage provided to the assistance eligible service providers fall into this category.

Instructions for Form 7200 (Rev. 4-2021) -5-

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For more information about third-party payers and             Line B. Enter the total number of employees to whom 
Form 7200, see the frequently asked questions at              you paid qualified wages eligible for the employee 
IRS.gov/PLC. Also, see Employment Tax Return Filed by         retention credit this quarter. This includes all employees to 
a Third-Party Payer, earlier.                                 whom you paid qualified wages so far in the current 
Applicable calendar quarter.  Check the box to indicate       quarter. The number on this line is a cumulative total for 
the applicable calendar quarter of 2021 for which you’re      the quarter. If you later file another Form 7200 to request 
filing Form 7200. If you file an annual employment tax        an advance payment of any employee retention credit, 
return (Form 943, 944, or CT-1), you should still check the   report the total numbers of employees receiving qualified 
box to indicate the applicable calendar quarter of 2021 in    wages so far during the quarter, including any new ones 
which the wages are paid. You may check only one box          taken into account for this advance. If you later file another 
for the quarter; you can't file Form 7200 for 2 separate      Form 7200 to request an advance of the employee 
quarters using one Form 7200. If you need to file Form        retention credit on the same group of employees, this 
7200 for 2 separate quarters, file a separate Form 7200       number shouldn’t change.
for each quarter.                                             Line C. If you’re a new business that hasn't yet filed an 
        The employer tax credits for qualified sick and       employment tax return, skip line C. Also skip line C if 
                                                              you're a multiemployer plan or insurer described earlier 
CAUTION taken before October 1, 2021. You may be eligible 
!       family leave wages apply to wages paid for leave      under the instructions for line A. If you've already filed an 
to request an advance of the qualified sick and family        employment tax return for at least 1 tax period, you must 
leave credit for qualified sick and family leave wages paid   complete line C. Enter the amount reported on line 2, 
after September 30, 2021, if it is for leave taken before     Wages, tips, and other compensation, of your most 
October 1, 2021.                                              recently filed Form 941. The IRS will use this information 
                                                              to verify that the credit is being paid to the correct 
The employee retention credit applies to wages paid           employer. If the amount entered doesn't equal the amount 
before January 1, 2022. If you're requesting an advance of    shown on your most recently filed employment tax return, 
the employee retention credit, you may check the box for      that may delay or prevent the processing of your Form 
the second, third, or fourth quarter of 2021. You may not     7200. If your wages are reported on Schedule R (Form 
request an advance of the employee retention credit after     941), enter the wages reported by your third-party payer 
the fourth quarter of 2021.                                   for your EIN on its most recently filed Schedule R (Form 
                                                              941), column (d). If your wages are reported on 
The COBRA premium assistance credit applies to                Schedule R (Form 943), enter the social security tax 
premium assistance provided for periods of coverage           reported by your third-party payer for your EIN on its most 
beginning on or after April 1, 2021, through periods of       recently filed Schedule R (Form 943), column (d). See 
coverage beginning on or before September 30, 2021.           Employment Tax Return Filed by a Third-Party Payer, 
Although the premium assistance isn't available for           earlier. If you file a different employment tax return, report 
periods of coverage beginning after September 30, 2021,       the amount from your most recently filed return as follows.
employers may be eligible to claim the credit in the fourth       • Form 941-PR, line 5a, Salarios sujetos a la contribución 
quarter of 2021, depending on when the assistance             al Seguro Social. Enter the amount reported in columna 1.
eligible individual elects coverage. See the instructions for     • Form 941-SS, line 5a, Taxable social security wages. 
line 4, later.                                                Enter the amount reported in column 1.
Part I: Tell Us About Your                                        • Form 943, line 2, Wages subject to social security tax.
                                                                  • Form 943-PR, line 2, Salarios sujetos a la contribución 
Employment Tax Return                                         al Seguro Social.
                                                                  • Form 944, line 1, Wages, tips, and other compensation.
Lines A–H                                                         • Form 944(SP), line 1, Salarios, propinas y otras 
Line A. Check the box to tell us which employment tax         remuneraciones.
return you file or will file for 2021. Check only one box. If     • Form CT-1, line 1, Tier 1 employer tax—compensation 
you will file two employment tax returns for the same         (other than tips and sick pay). Enter the amount reported 
period, such as Form 941 and Form 943, you should file a      in the Compensation column.
separate Form 7200 for advance payments of the credit         Line D. If you're a new business that hasn't yet filed an 
you will claim on each form and identify the relevant         employment tax return, skip line D. Also skip line D if 
employment tax return on each separate Form 7200.             you're a multiemployer plan or insurer described earlier 
Although railroad employers file both a Form 941 and          under the instructions for line A. If you've already filed an 
Form CT-1, they must check the “CT-1” box only. Some          employment tax return for at least 1 tax period, you must 
multiemployer plans and insurers don't normally file an       complete line D. Enter the tax period of your most recently 
employment tax return but will need to file one if they want  filed employment tax return for which you checked the box 
to claim the COBRA premium assistance credit. If you          on line A. For example, if your most recently filed 
plan to request the credit on an employment tax return        employment tax return is Form 941 for the fourth quarter 
and you're filing Form 7200 to request an advance of the      of 2020, enter “Q4 2020.” If your most recently filed 
anticipated credit, check the box for "Form 941" and write    employment tax form is Form 943 for 2020, enter “2020.”
"Multiemployer Plan" or "Insurer," whichever is applicable, 
                                                              Line E. Advance payments of the employee retention 
above the dotted line to the left of the line 4 entry box.
                                                              credit for 2021 are limited to small employers that in 2019 
                                                              averaged 500 or fewer full-time employees (within the 

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meaning of section 4980H); aggregation rules apply. If • Had average annual gross receipts of $1 million or less
you're requesting an advance payment of the employee for the 3 tax years ending with the tax year before the
retention credit (Part II, line 1), enter the average number calendar quarter in which the employee retention credit is
of full-time employees you had in 2019. If your business claimed; and
wasn’t in existence in 2019, enter the average number of • Isn't otherwise eligible for the third or the fourth quarter,
full-time employees you had in 2020. If you enter 501 or as applicable, for the employee retention credit because
more for line E, you aren't eligible to receive an advance business operations aren't fully or partially suspended due
payment of the employee retention credit. However, you to a governmental order or because gross receipts (within
may still reduce your employment tax deposits and claim the meaning of section 448(c) or if you're a tax-exempt
the credits for which you are eligible on your applicable organization, section 6033) aren't less than 80% of the
employment tax return. See Certain advances are limited gross receipts for the same calendar quarter in calendar
to small employers, earlier. year 2019.
Line F. If you're requesting an advance payment of the Recovery startup businesses are limited to a
credit for qualified sick leave wages and/or qualified family ! maximum employee retention credit of $50,000
leave wages (Part II, lines 2 and/or 3), enter the number of CAUTION per quarter. If you check the box on line H, don't
employees you had when qualified leave was taken enter more than $50,000 on line 1.
during the quarter for the advance requested on line 9. A
business is considered to have fewer than 500 employees Part II: Enter Your Credits and
if, at the time an employee's leave is to be taken, the
business employs fewer than 500 full-time and part-time Advance Requested
employees. For more information, see IRS.gov/PLC and
guidance from the Department of Labor at DOL.gov/ Lines 1–9
agencies/whd/pandemic. The amounts entered on lines 1, 2, 3, 4, 6, and 7
Line G. Enter the number of individuals provided COBRA ! are cumulative totals for the quarter. For example,
premium assistance during the quarter for the advance CAUTION if you file Form 7200 on May 24, 2021, because
requested on line 9. Enter a cumulative total for the you have a $7,000 employee retention credit that is
quarter similar to the way that cumulative totals are eligible to be advanced and reported on line 1 and you
entered on lines 1, 2, 3, 4, 6, and 7; see Caution below reduced deposits by $4,000 to account for the credit
Lines 1–9, later. Count each assistance eligible individual (line 6), but you previously filed a Form 7200 on May 10,
that received assistance as one individual, whether or not 2021, that reported $5,000 on line 1 and reduced deposits
the COBRA coverage was for insurance that covered of $3,500 on line 6, the Form 7200 you file on May 24,
more than one assistance eligible individual. For example, 2021, will report $12,000 on line 1, $7,500 on line 6, and
if the coverage was for a former employee, spouse, and $1,500 on line 7 (advance from Form 7200, line 9, filed
two children, you would include one individual on line G. May 10). The advance payment requested (line 9) on May
Further, each individual is reported only once per quarter. 24 is $3,000. If you later file another Form 7200 to request
For example, an assistance eligible individual that an advance payment of any leave credits on lines 2 and 3,
received assistance for all 3 months of a quarter is only you must still enter your cumulative totals for the quarter
reported as one individual. on lines 1, 2, 3, 4, 6, and 7 even if you're not reporting any
COBRA background. The Consolidated Omnibus new amount for the employee retention credit on line 1.
Budget Reconciliation Act of 1985 (COBRA) provides
There are two separate 70% limitations that apply
certain former employees, retirees, spouses, former
to an advance payment of the employee retention
spouses, and dependent children the right to temporary CAUTION!
credit. First, the employee retention credit itself is
continuation of health coverage at group rates. COBRA
limited to 70% of the amount of the qualified wages you
generally covers multiemployer health plans and health
paid to your employees so far in the current quarter.
plans maintained by private-sector employers (other than
Second, the amount of the credit that may be advanced is
churches) with 20 or more full- and part-time employees.
further limited to an amount that doesn't exceed 70% of
Parallel requirements apply to these plans under the
your average quarterly wages that you paid in calendar
Employee Retirement Income Security Act of 1974
year 2019. For more information, see Employee retention
(ERISA). Under the Public Health Service Act, COBRA
credit eligible to be advanced for the quarter is limited,
requirements also apply to health plans covering state or
later.
local government employees. Similar requirements apply
under some state laws. Line 1. Total employee retention credit for the quar-
Line H is applicable for only the third and fourth ter. Enter the total employee retention credit advance for
TIP quarter of 2021. Skip line H when completing the quarter. This is the lesser of your credit for qualified
Form 7200 for the second quarter of 2021. wages paid in the quarter through the date of your filing
Form 7200 or the amount eligible to be advanced. You
Line H. Check the box if you qualify for the employee may not enter an amount on line 1 if you had an average
retention credit solely because your business is a of more than 500 employees in 2019; see Certain
recovery startup business. advances are limited to small employers and the
A recovery startup business is an employer that: instructions for line E, earlier. Your employee retention
• Began carrying on a trade or business after February credit for a quarter is 70% of the amount of the qualified
15, 2020; wages you paid to your employees in the quarter.

Instructions for Form 7200 (Rev. 4-2021) -7-

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Qualified wages, including qualified health expenses, may     sections 41, 45A, 45P, 45S, 51, and 1396. For the third 
not exceed $10,000 for any employee for the quarter.          and fourth quarters, qualified wages under section 3134 
Therefore, the maximum employee retention credit per          don't include wages taken into account for credits under 
employee per quarter is $7,000 ($10,000 x 70%) and the        sections 41, 45A, 45P, 45S, 51, 1396, 3131, and 3132. 
maximum amount you may enter on line 1 for the quarter        For the third and fourth quarters of 2021, qualified wages 
can't exceed the number of employees you entered on           also don't include wages that were used as payroll costs 
line B multiplied by $7,000. Additionally, the amount you     in connection with a Shuttered Venue Operator Grant 
enter on line 1 may not exceed a certain amount; see          under section 324 of the Economic Aid to Hard-Hit Small 
Amount of advance for the employee retention credit is        Businesses, Nonprofits, and Venues Act; or a restaurant 
limited, earlier, and Employee retention credit eligible to   revitalization grant under section 5003 of the ARP. For all 
be advanced for the quarter is limited, later. You may not    quarters of 2021, employers can receive both a Small 
know you have qualified wages entitling you to the            Business Interruption Loan under the PPP and the 
employee retention credit until you have determined that      employee retention credit; however, employers can't 
you have a reduction in gross receipts necessary to           receive both loan forgiveness and a credit for the same 
qualify as an eligible employer. Certain governmental         wages.
entities are entitled to the credit, including (1) federal        See Notice 2021-23 for guidance on the employee 
instrumentalities described in section 501(c)(1) and          retention credit for qualified wages paid after December 
exempt from tax under section 501(a); and (2) any             31, 2020, and before July 1, 2021. The IRS expects to 
government, agency, or instrumentality that is a college or   issue guidance about the employee retention credit for 
university or the principal purpose or function of the entity wages paid after June 30, 2021, and before January 1, 
is providing medical or hospital care.                        2022, later this year. A link to any new guidance issued 
Qualified wages, including qualified health plan              will be posted at IRS.gov/ERC.
expenses, are limited to a maximum of $10,000 for each            Qualified health plan expenses for the employee 
employee for the quarter. Qualified wages are wages for       retention credit. Qualified wages for the employee 
social security and Medicare tax purposes (for                retention credit include qualified health plan expenses. 
governmental entities, determined without regard to           Qualified health plan expenses are amounts paid or 
section 3121(b)(5), (6), (7), (10), or (13), except for       incurred by the employer to provide and maintain a group 
services performed by an inmate at a penal institution)       health plan but only to the extent such amounts are 
paid to certain employees during any period in a quarter in   excluded from the employees' income as coverage under 
which your business operations are fully or partially         an accident or health plan. The amount of qualified health 
suspended due to a governmental order or during a             plan expenses taken into account in determining the 
quarter in which your gross receipts (within the meaning of   amount of qualified wages generally includes both the 
section 448(c) or if you're a tax-exempt organization,        portion of the cost paid by the employer and the portion of 
section 6033) are less than 80% of the gross receipts for     the cost paid by the employee with pre-tax salary 
the same calendar quarter in calendar year 2019; or, for      reduction contributions. However, the qualified health plan 
the third and fourth quarters of 2021, wages paid by a        expenses shouldn't include amounts that the employee 
recovery startup business.                                    paid for with after-tax contributions. Generally, the amount 
For 2021, the wages and qualified health plan                 of qualified health plan expenses is the amount that is 
expenses considered in calculating your credit depend on      allocable to the hours for which the employees receive 
the size of your workforce. Eligible employers that had an    qualified wages for the employee retention credit. 
average number of 500 or fewer full-time employees            However, qualified health plan expenses for purposes of 
during 2019 count wages paid to all their employees and       the employee retention credit may include health plan 
the qualified health plan expenses paid or incurred for all   expenses allocable to the applicable periods even if the 
employees during any period in the quarter in which           employer isn’t paying any qualified wages to the 
business operations are fully or partially suspended due to   employee.
a governmental order or during a quarter in which gross       Employee retention credit eligible to be advanced for 
receipts are less than 80% of the gross receipts for the      the quarter is limited. After you figure the total amount 
same calendar quarter in calendar year 2019. Eligible         of the employee retention credit for the quarter, you must 
employers that had an average number of more than 500         determine if the total amount you may enter on line 1 for 
full-time employees in 2019 may count only wages paid to      the quarter is limited. The total amount of the advance of 
employees for time that the employees weren't providing       the employee retention credit for the quarter is limited to 
services, and qualified health plan expenses paid or          an amount that doesn’t exceed 70% of your average 
incurred by the employer allocable to the time those          quarterly wages that you paid in calendar year 2019. If 
employees weren't providing services, due to the              you're a seasonal employer, you may elect to limit the 
suspension or decline in gross receipts. However,             amount of the advance to 70% of your average quarterly 
employers that had an average number of more than 500         wages you paid for the calendar quarter in 2019 that 
full-time employees in 2019 can't request an advance of       corresponds to the calendar quarter for which you're filing 
the employee retention credit.                                Form 7200 instead of your average quarterly wages for 
For the second quarter, qualified wages don't include         2019. If you're an employer that didn’t exist in 2019, the 
wages for which the employer receives a credit for sick       amount of the advance is limited to 70% of your average 
and family leave, and any wages taken into account in         quarterly wages that you paid in calendar year 2020. For 
determining the employee retention credit can't be taken      the third and fourth quarters of 2021, the amount of your 
into account as wages for purposes of the credits under       credit may be further limited to $50,000 per quarter if the 

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sole reason you qualify for the employee retention credit is be taken into account as wages for purposes of the
because you're a recovery startup business; see the credits under sections 45A, 45P, 45S, 51, 1396, and
instructions for line H, earlier. Aggregation rules apply. 3132. For the third quarter, the qualified sick leave credit
See Notice 2021-23 for guidance on the employee is reduced by the amount of the credit allowed under
retention credit for qualified wages paid after December section 41 (for the credit for increasing research activities)
31, 2020, and before July 1, 2021. The IRS expects to with respect to wages taken into account for determining
issue guidance about the employee retention credit for the qualified sick leave credit; and any wages taken into
wages paid after June 30, 2021, and before January 1, account in determining the qualified sick leave credit can't
2022, later this year. A link to any new guidance issued be taken into account as wages for purposes of the
will be posted at IRS.gov/ERC. credits under sections 45A, 45P, 45S, 51, 1396, 3132,
and 3134. For both the second and third quarters of 2021,
The rules for qualified sick leave wages discussed
qualified wages also don't include wages that were used
! below apply to qualified sick leave wages paid for as payroll costs in connection with a Shuttered Venue
CAUTION leave taken after March 31, 2021.
Operator Grant under section 324 of the Economic Aid to
Line 2. Total qualified sick leave wages eligible for Hard-Hit Small Businesses, Nonprofits, and Venues Act;
the credit and paid this quarter. Enter the qualified or a restaurant revitalization grant under section 5003 of
sick leave wages you paid so far in the quarter. You may the ARP. Employers can receive both a Small Business
add the following amounts to this line. Interruption Loan under the PPP and the credit for
• Your cost of maintaining health insurance coverage for qualified sick leave wages; however, employers can't
the employee during the sick leave period (see Qualified receive both loan forgiveness and a credit for the same
health plan expenses allocable to qualified sick leave and wages.
family leave wages, later). Emergency Paid Sick Leave Act (EPSLA).
• Collectively bargained defined benefit pension plan Employers with fewer than 500 employees (and certain
contributions allocable to the qualified sick leave wages governmental employers without regard to number of
paid. employees), except for the federal government (and its
• Collectively bargained apprenticeship program agencies and instrumentalities, except for those that are
contributions allocable to the qualified sick leave wages described in section 501(c)(1)), are entitled to a credit if
paid. they provide paid sick leave to employees that otherwise
• The employer share of social security and Medicare tax meets the requirements of the EPSLA. Under the EPSLA,
allocable to the qualified sick leave wages paid. as amended for purposes of the ARP, wages are qualified
sick leave wages if paid to employees that are unable to
If you're a private employer, you can’t claim the credit
work or telework before October 1, 2021, because the
or enter an amount on line 2 if you had 500 or more
employee:
full-time and part-time employees at the time the leave
was taken. See Certain advances are limited to small 1. Is subject to a federal, state, or local quarantine or
employers and the instructions for line F, earlier. You also isolation order related to COVID-19;
can’t claim the credit or enter an amount on line 2 in a 2. Has been advised by a health care provider to
quarter in which you provide the leave in a manner that self-quarantine due to concerns related to COVID-19;
discriminates in favor of highly compensated employees, 3. Is experiencing symptoms of COVID-19 and
full-time employees, or employees on the basis of seeking a medical diagnosis, is seeking or awaiting the
employment tenure when making qualified sick leave results of a diagnostic test for, or a medical diagnosis of,
available to employees. See Highly compensated COVID-19 (and the employee has been exposed to
employee, later, for the definition. COVID-19 or the employee's employer has requested
Qualified sick leave wages are wages for social such test or diagnosis), or the employee is obtaining
security and Medicare tax purposes, determined without immunizations related to COVID-19 or recovering from an
regard to the exclusions from the definition of employment injury, disability, illness, or condition related to such
under sections 3121(b)(1)–(22), that an employer pays immunization;
that otherwise meet the requirements of the EPSLA, as 4. Is caring for an individual subject to an order
enacted under the FFCRA and amended for purposes of described in (1) or who has been advised as described in
the ARP. For Form CT-1 filers, qualified sick leave (2);
compensation is compensation, determined without
regard to the exclusions under section 3231(e)(1), that an 5. Is caring for a son or daughter because the school
employer pays that otherwise meets the requirements of or place of care for that child has been closed, or the
the EPSLA, as enacted under the FFCRA and amended childcare provider for that child is unavailable, due to
for purposes of the ARP. For the second quarter, the COVID-19 precautions; or
qualified sick leave credit is reduced by the amount of the 6. Is experiencing any other substantially similar
credit allowed under section 2301 of the CARES Act (for condition specified by the U.S. Department of Health and
the employee retention credit) or under section 41 (for the Human Services.
credit for increasing research activities) with respect to Son or daughter. For purposes of this credit, a son or
wages taken into account for determining both the credit daughter must generally have been under 18 years of age
under section 2301 of the CARES Act or section 41 and or incapable of self-care because of a mental or physical
the qualified sick leave credit; and any wages taken into disability. A son or daughter includes a biological child,
account in determining the qualified sick leave credit can't adopted child, stepchild, foster child, legal ward, or a child

Instructions for Form 7200 (Rev. 4-2021) -9-

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for whom the employee assumes parental status and             employers and the instructions for line F, earlier. You also 
carries out the obligations of a parent. For more             can’t claim the credit or enter an amount on line 3 in a 
information about who is a son or daughter under the          quarter in which you provide the leave in a manner that 
FFCRA, see DOL.gov/agencies/whd/pandemic.                     discriminates in favor of highly compensated employees, 
                                                              full-time employees, or employees on the basis of 
        The 80-hour limit discussed next is the combined 
                                                              employment tenure when making qualified family leave 
TIP     total allowed in the second and third quarters of 
                                                              available to employees. See Highly compensated 
        2021. If an employee received qualified sick leave 
                                                              employee, later, for the definition.
wages for leave taken before April 1, 2021, those hours 
don't reduce the 80 combined hours allowed in the                  Qualified family leave wages are wages for social 
second and third quarters of 2021.                            security and Medicare tax purposes, determined without 
                                                              regard to the exclusions from the definition of employment 
  Limits on qualified sick leave wages. The EPSLA             under sections 3121(b)(1)–(22), that an employer pays 
provides different limitations for different circumstances    that otherwise meet the requirements of the Expanded 
under which qualified sick leave wages are paid. For paid     FMLA, as enacted under the FFCRA and amended for 
sick leave qualifying under (1), (2), or (3), earlier, the    purposes of the ARP. For Form CT-1 filers, qualified 
amount of qualified sick leave wages is determined at the     family leave compensation is compensation, determined 
employee's regular rate of pay, but the wages may not         without regard to the exclusions under section 3231(e)(1), 
exceed $511 for any day (or portion of a day) for which the   that an employer pays that otherwise meets the 
individual is paid sick leave. For paid sick leave qualifying requirements of the Expanded FMLA, as enacted under 
under (4), (5), or (6), earlier, the amount of qualified sick the FFCRA and amended for purposes of the ARP. For 
leave wages is determined at two-thirds the employee's        the second quarter, the qualified family leave credit is 
regular rate of pay, but the wages may not exceed $200        reduced by the amount of the credit allowed under section 
for any day (or portion of a day) for which the individual is 2301 of the CARES Act (for the employee retention credit) 
paid sick leave. The EPSLA also limits each individual to a   or under section 41 (for the credit for increasing research 
maximum of up to 80 hours of paid sick leave. Therefore,      activities) with respect to wages taken into account for 
the maximum amount of paid sick leave wages paid to           determining both the credit under section 2301 of the 
one employee can’t exceed $5,110 for an employee for          CARES Act or section 41 and the qualified family leave 
leave under (1), (2), or (3), and it can’t exceed $2,000 for  credit; and any wages taken into account in determining 
an employee for leave under (4), (5), or (6). For more        the qualified family leave credit can't be taken into account 
information from the Department of Labor on these             as wages for purposes of the credits under sections 45A, 
requirements and limits, see DOL.gov/agencies/whd/            45P, 45S, 51, 1396, and 3131. For the third quarter, the 
pandemic.                                                     qualified family leave credit is reduced by the amount of 
  The credit for qualified sick leave wages is only           the credit allowed under section 41 (for the credit for 
available for wages paid for leave taken before October 1,    increasing research activities) with respect to wages 
2021. For more information about the credit for qualified     taken into account for determining the qualified family 
sick leave wages, and to see if future legislation extends    leave credit; and any wages taken into account in 
the dates through which the credit may be claimed, go to      determining the qualified family leave credit can't be taken 
IRS.gov/PLC.                                                  into account as wages for purposes of the credits under 
        The rules for qualified family leave wages            sections 45A, 45P, 45S, 51, 1396, 3131, and 3134. For 
                                                              both the second and third quarters of 2021, qualified 
  !     discussed below apply to qualified family leave       wages also don't include wages that were used as payroll 
CAUTION wages paid for leave taken after March 31, 2021.
                                                              costs in connection with a Shuttered Venue Operator 
Line 3. Total qualified family leave wages eligible for       Grant under section 324 of the Economic Aid to Hard-Hit 
the credit and paid this quarter.  Enter the qualified        Small Businesses, Nonprofits, and Venues Act; or a 
family leave wages you paid so far in the quarter. You may    restaurant revitalization grant under section 5003 of the 
add the following amounts to this line.                       ARP. Employers can receive both a Small Business 
• Your cost of maintaining health insurance coverage for      Interruption Loan under the PPP and the credit for 
the employee during the family leave period (see Qualified    qualified family leave wages; however, employers can't 
health plan expenses allocable to qualified sick leave and    receive both loan forgiveness and a credit for the same 
family leave wages, later).                                   wages.
• Collectively bargained defined benefit pension plan              Emergency Family and Medical Leave Expansion 
contributions allocable to the qualified family leave wages   Act (Expanded FMLA). Employers with fewer than 500 
paid.                                                         employees (and certain governmental employers without 
• Collectively bargained apprenticeship program               regard to number of employees), except for the federal 
contributions allocable to the qualified family leave wages   government (and its agencies and instrumentalities, 
paid.                                                         except for those that are described in section 501(c)(1)), 
• The employer share of social security and Medicare tax      are entitled to a credit if they provide paid family leave to 
allocable to the qualified family leave wages paid.           employees that otherwise meets the requirements of the 
                                                              Expanded FMLA. Under the Expanded FMLA, wages are 
  If you're a private employer, you may not claim the 
                                                              qualified family leave wages if paid to an employee who 
credit or enter an amount on line 3 if you had 500 or more 
                                                              has been employed for at least 30 calendar days when an 
full-time and part-time employees at the time the leave 
                                                              employee is unable to work or telework for any reason 
was taken. See Certain advances are limited to small 

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provided by the EPSLA, as amended for purposes of the Allocation rules. The amount of collectively bargained
ARP. defined benefit pension plan contributions allocated to
The employer provides the employee paid leave (that qualified sick leave wages and/or qualified family leave
is, qualified family leave wages) for up to 12 weeks. For wages in a quarter is the pension contribution rate
more information from the Department of Labor on these (expressed as an hourly rate) multiplied by the number of
requirements, possible exceptions, and the limitations hours of qualified sick leave wages and/or qualified family
discussed next, see DOL.gov/agencies/whd/pandemic. leave wages that were provided to employees covered
under the collective bargaining agreement during the
The 12-week limit discussed above and the quarter.
TIP $12,000 limit discussed next are the combined
total allowed in the second and third quarters of Collectively bargained apprenticeship program con-
2021. If an employee received qualified family leave tributions. For purposes of qualified sick and family
wages for leave taken before April 1, 2021, those wages leave wages, collectively bargained apprenticeship
don't reduce the 12-week limit or $12,000 amount allowed program contributions are contributions for a calendar
in the second and third quarters of 2021. quarter that are:
• Paid or incurred by an employer on behalf of its
Rate of pay and limit on wages. The rate of pay must employees to a registered apprenticeship program, which
be at least two-thirds of the employee’s regular rate of pay is an apprenticeship registered under the National
(as determined under the Fair Labor Standards Act of Apprenticeship Act of August 16, 1937, and meets the
1938), multiplied by the number of hours the employee standards of Federal Regulations under subpart A of Part
would otherwise have been scheduled to work. The 29 and Part 30 of Title 29;
qualified family leave wages can’t exceed $200 per day or • Made based on an apprenticeship program contribution
$12,000 in the aggregate per employee. rate; and
The credit for qualified family leave wages is only • Required to be made under the terms of a collective
available for wages paid for leave taken before October 1, bargaining agreement in effect for the quarter.
2021. For more information about the credit for qualified Apprenticeship program contribution rate. The
family leave wages, and to see if future legislation extends apprenticeship program contribution rate is the
the dates through which the credit may be claimed, go to contribution rate that the employer is obligated to pay
IRS.gov/PLC. under the terms of a collective bargaining agreement for
Qualified health plan expenses allocable to qualified benefits under a registered apprenticeship program, as
sick leave and family leave wages. The credit for the rate is applied to contribution base units, as defined by
qualified sick leave wages and qualified family leave section 4001(a)(11) of ERISA.
wages is increased to cover the qualified health plan Allocation rules. The amount of collectively bargained
expenses that are properly allocable to the qualified leave apprenticeship program contributions allocated to
wages for which the credit is allowed. These qualified qualified sick leave wages and/or qualified family leave
health plan expenses are amounts paid or incurred by the wages in a quarter is the apprenticeship program
employer to provide and maintain a group health plan but contribution rate (expressed as an hourly rate) multiplied
only to the extent such amounts are excluded from the by the number of hours qualified sick leave wages and/or
employees' income as coverage under an accident or qualified family leave wages were provided to employees
health plan. The amount of qualified health plan expenses covered under the collective bargaining agreement during
generally includes both the portion of the cost paid by the the quarter.
employer and the portion of the cost paid by the employee Highly compensated employee. A highly compensated
with pre-tax salary reduction contributions. However, employee is an employee who meets either of the
qualified health plan expenses don't include amounts that following tests.
the employee paid for with after-tax contributions. For 1. The employee was a 5% owner at any time during
more information, go to IRS.gov/PLC. the year or the preceding year.
Collectively bargained defined benefit pension plan 2. The employee received more than $130,000 in pay
contributions. For purposes of qualified sick and family for the preceding year.
leave wages, collectively bargained defined benefit
pension plan contributions are contributions for a calendar You can choose to ignore test (2) if the employee
quarter that are: wasn’t also in the top 20% of employees when ranked by
• Paid or incurred by an employer on behalf of its pay for the preceding year.
employees to a defined benefit plan, as defined in section Line 4. Total COBRA premium assistance provided
414(j), which meets the requirements of section 401(a); this quarter. Enter the COBRA premium assistance that
• Made based on a pension contribution rate; and you provided so far in the quarter. You can claim the credit
• Required to be made under the terms of a collective for a period of coverage once the individual elects
bargaining agreement in effect for the quarter. COBRA continuation coverage, and for any period of
Pension contribution rate. The pension contribution coverage beginning after the election, as of the beginning
rate is the contribution rate that the employer is obligated of such period of coverage for which the individual doesn't
to pay under the terms of a collective bargaining pay the premiums for the coverage. You may reduce your
agreement to a defined benefit plan, as the rate is applied deposits of federal employment taxes in anticipation of the
to contribution base units, as defined by section 4001(a) COBRA premium assistance credit with regard to a period
(11) of ERISA. of coverage as of the date you are entitled to the credit. If

Instructions for Form 7200 (Rev. 4-2021) -11-

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the anticipated credit exceeds the available reduction in We will apply any advance requested to any past
deposits, you may request an advance after the end of the ! due tax account that is shown in our records
payroll period in which you became entitled to the credit. CAUTION under your EIN before paying the advance you
Don't include any amount that was included as qualified requested.
wages for the employee retention credit or included as
qualified health plan expenses allocable to qualified sick Third-Party Designee
leave and family leave wages. See COBRA background,
earlier, for more information about COBRA. If you want to allow an employee, a paid tax preparer, or
another person to discuss your Form 7200 with the IRS,
Example. Maple Co. has a semimonthly payroll
check the “Yes” box in the Third-Party Designee section.
period. Sophie Rose elected COBRA premium assistance
Enter the name, phone number, and the five-digit personal
on May 17, 2021. Maple Co. becomes entitled to a
identification number (PIN) of the specific person to speak
COBRA premium assistance credit as of May 17, 2021,
with—not the name of the firm that prepared Form 7200.
for the premiums not paid by Sophie (an assistance
The designee may choose any five numbers as his or her
eligible individual) for the periods of coverage of April 1,
PIN.
2021, through April 30, 2021, and May 1, 2021, through
May 31, 2021. Maple Co. may reduce its federal By checking “Yes,” you authorize the IRS to talk to the
employment deposits as of May 17, 2021, in anticipation person you named (your designee) about any questions
of the credit to which Maple Co. has become entitled. If we may have while we process your Form 7200. You also
the anticipated credit exceeds the available reduction in authorize your designee to do all of the following.
deposits, Maple Co. may file Form 7200 to request an • Give us any information that is missing from your Form
advance for the remaining credit after the end of the 7200.
semimonthly payroll period in which Maple Co. became • Call us for information about processing your Form
entitled to the credit, or June 1, 2021. 7200.
Line 5. Add lines 1, 2, 3, and 4. Add lines 1, 2, 3, and 4 • Respond to certain IRS notices that you’ve shared with
and enter the result on line 5. your designee about math errors and Form 7200
preparation. The IRS won't send notices to your designee.
Line 6. Total amount by which you have already re-
duced your federal employment tax deposits for You’re not authorizing your designee to bind you to
these credits for this quarter. Enter the amount by anything (including additional tax liability) or to otherwise
which you have already reduced your total federal represent you before the IRS. If you want to expand your
employment tax deposits for these credits for this quarter. designee's authorization, see Pub. 947.
Enter the amount as a positive number. If you don’t enter The authorization will automatically expire after 1 year.
this amount, or you enter the incorrect amount, you may If you or your designee wants to terminate the
have an underpayment when you file your employment authorization, write to the IRS office for your location using
tax return. the Without a payment address in the instructions for your
Line 7. Total advanced credits requested on previous employment tax return.
filings of this form for this quarter. Enter the amount
Sign Here (Approved Roles)
of any advances that you applied for on previous filings of
this form for this quarter. If you don’t enter this amount, or Complete all information and sign Form 7200. The
you enter the incorrect amount, you may have an following persons are authorized to sign Form 7200 for
underpayment when you file your employment tax return. each type of business entity.
Line 8. Add lines 6 and 7. Add lines 6 and 7 and enter • Sole proprietorship—The individual who owns the
the result on line 8. business.
• Corporation (including a limited liability company
Line 9. Advance requested. Subtract line 8 from line 5 (LLC) treated as a corporation)—The president, vice
and enter the amount on line 9. If the amount is zero or president, or other principal officer duly authorized to sign.
less, don’t file this form; you’re not eligible to receive an • Partnership (including an LLC treated as a
advance. The minimum amount that will be paid as an partnership) or unincorporated organization—A
advance is $25. If the amount on line 9 is less than $25, responsible and duly authorized partner, member, or
don't file Form 7200. However, you may still claim the officer having knowledge of its affairs.
credits for which you're eligible on your employment tax • Single-member LLC treated as a disregarded entity
return. You will need to report the amount of the advance for federal income tax purposes—The owner of the
that you request on your employment tax return for the LLC or a principal officer duly authorized to sign.
return period, as well as the amounts that you requested • Trust or estate—The fiduciary.
on line 9 of other Forms 7200 that you file during the
return period. You will report the total amount of the Form 7200 may be signed by a duly authorized agent
advances you received from filing Form 7200 for the of the taxpayer if a valid power of attorney has been filed.
quarter on Form 941, line 13h. If you file Form 943, 944, or In many circumstances, whether the person signing the
CT-1, see the form that you file and its instructions for the Form 7200 is duly authorized or has knowledge of the
specific lines on which the credits and advances are partnership's or unincorporated organization's affairs is
reported. not apparent on the Form 7200. To help expedite and
ensure proper processing of Forms 7200, if a taxpayer
has duly authorized an officer, partner, or member to sign

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Form 7200 (and that person isn’t otherwise explicitly Internal Revenue laws of the United States. You’re not
permitted to sign the Form 7200 by the nature of his or her required to request advance payment of the credit for
job title), the taxpayer should submit with Form 7200 a qualified sick or family leave wages, or the employee
copy of the Form 2848, Power of Attorney and Declaration retention credit; if you do request it, you’re required to give
of Representative, authorizing the person to sign the Form us the information requested on this form. Subtitle C,
7200. Employment Taxes, of the Internal Revenue Code
imposes employment taxes on wages and provides for
Payroll Reporting Agents Can Sign and Submit income tax withholding. Section 6109 requires you to
Form 7200 on Behalf of Clients provide your identification number. Sections 6001, 6011,
A payroll reporting agent (RA) may sign Form 7200 for a and 7805 authorize us to collect the other information. We
client for which it has the authority, via Form 8655, need it to figure the right credit and figure and collect the
Reporting Agent Authorization, to sign and file the right amount of tax. Failure to provide this information may
employment tax return (for example, Form 941). The delay or prevent processing your request; providing false
signatory must be the Principal or Responsible Official or fraudulent information may subject you to penalties.
listed on the RA's e-file application. The signatory may You’re not required to provide the information
sign with ink on paper or may use the alternative signature requested on a form that is subject to the Paperwork
method (rubber stamp, mechanical device, or computer Reduction Act unless the form displays a valid OMB
software program); for details and required control number. Books or records relating to a form or its
documentation, see Rev. Proc. 2005-39, 2005-28 I.R.B. instructions must be retained as long as their contents
82, available at IRS.gov/irb/2005-28_IRB#RP-2005-39. may become material in the administration of any Internal
Consistent with Rev. Proc. 2005-39, an alternative Revenue law.
signature must be in the form of a facsimile signature. The
RA will submit the form via fax to 855-248-0552. The RA Generally, tax returns and return information are
must obtain written authorization from the client (paper, confidential, as required by section 6103. However,
fax, or email) to perform these actions regarding the Form section 6103 allows or requires us to disclose this
7200. The RA doesn’t need to submit that authorization to information to others as described in the Code. We may
the IRS, but should retain it in its files so that the RA can disclose your tax information to the Department of Justice
furnish it to the IRS upon request. For a client for which a for civil and criminal litigation, and to cities, states, the
third party doesn’t have a Reporting Agent Authorization, District of Columbia, and U.S. commonwealths and
it may complete and print the form, or it may provide the possessions to administer their tax laws. We may disclose
client a means to complete and print the form, but the this information to the Social Security Administration for
client will have to sign it. The signatory for the RA must administration of the Social Security Act. We may also
sign, date, and print his or her name in the relevant boxes disclose this information to other countries under a tax
on Form 7200. In the "Printed title" box, the signatory must treaty, to federal and state agencies to enforce federal
include the RA company name or name of business as it nontax criminal laws, or to federal law enforcement and
appeared on line 9 of the Form 8655. If the RA company intelligence agencies to combat terrorism.
name or name of business from the Form 8655 is missing, The time needed to complete and file Form 7200 will
the Form 7200 can't be processed. vary depending on individual circumstances. The
Paid Preparer Use Only estimated average time is:

Recordkeeping
A paid preparer must sign Form 7200 and provide the . . . . . . . . . . . . . . . . . . . . . . . 7 hr., 39 min.
Learning about the law or the form
information in the Paid Preparer Use Only section if the . . . . . . . . . 35 min.
preparer was paid to prepare Form 7200 and isn't an . . . . 45 min.
Preparing and sending the form to the IRS
employee of the filing entity. Paid preparers must sign
paper returns with a manual signature. The preparer must
give you a copy of Form 7200 in addition to the copy to be
filed with the IRS. If you have comments concerning the accuracy of
these time estimates or suggestions for making Form
If you’re a paid preparer, enter your Preparer Tax
7200 simpler, we would be happy to hear from you. You
Identification Number (PTIN) in the space provided.
can send us comments from IRS.gov/FormComments. Or
Include your complete address. If you work for a firm,
you can write to the Internal Revenue Service, Tax Forms
enter the firm's name and the EIN of the firm. You can
and Publications Division, 1111 Constitution Ave. NW,
apply for a PTIN online or by filing Form W-12. For more
IR-6526, Washington, DC 20224. Don't send Form 7200
information about applying for a PTIN online, go to
to this address. Instead, see How To File, earlier.
IRS.gov/PTIN. You can't use your PTIN in place of the EIN
of the tax preparation firm.

Privacy Act and Paperwork Reduction Act Notice.
We ask for the information on Form 7200 to carry out the

Instructions for Form 7200 (Rev. 4-2021) -13-

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