77c. If A Common Law Employer Uses A Third-Party Payer For Only A Portion Of Its Workforce, Should The Employer List The Third-Party Payer On The Form 7200?

October 1, 2022 Leave a comment

Frequently asked question #77c “If a common law employer uses a third-party payer for only a portion of its workforce, should the employer list the third-party payer on the Form 7200?” under the How to Claim the Employee Retention Credit section of FAQs: Employee Retention Credit under the CARES Act, provided by the IRS.gov to help business owners understand the ERC program. Information is below for the question #77c If a common law employer uses a third-party payer for only a portion of its workforce, should the employer list the third-party payer on the Form 7200?

ERC Credit Frequently Asked Question #77c:

How to Claim the Employee Retention Credit FAQs

77c. If a common law employer uses a third-party payer for only a portion of its workforce, should the employer list the third-party payer on the Form 7200?

In some cases, a common law employer may use the services of a third-party payer (such as a CPEO, PEO, or other section 3504 agent) to pay wages for only a portion of its workforce. In those circumstances, the third party payer files an employment tax return (such as the Form 941) for wages it paid to employees under its name and EIN, and the common law employer files an employment tax return for wages it paid directly to employees under its own name and EIN.

If the common law employer is claiming advance payments of credits for both wages paid directly to employees that will be reported on its own employment tax return and wages paid to other employees by a third party payer that will be reported on the third party payer’s employment tax return, two separate Forms 7200, Advance Payment of Employer Credits Due to COVID-19, should be filed: one for the wages paid by the common law employer with the name and EIN of the employer, and one for the wages paid by the third party payer with the name and EIN of both the common law employer and the third party payer.

To help expedite and ensure proper processing of Form 7200 and reconciliation of advance payment of the credits to the employment tax return when an employer uses a third party payer such as a CPEO, PEO, or other section 3504 agent for only a portion of their workforce, a common law employer should include the name and EIN of the third party payer only on the Form 7200 for advance payment of the credits for wages paid by the third party payer and reported on the third party payer’s employment tax return. 

The common law employer should not include the name and EIN of the third-party payer on the Form 7200 for advance payments of the credits claimed for wages paid by the common law employer and reported on the common law employer’s employment tax return.

For more Internal Revenue Service (IRS) Department of the Treasury Employee Retention Credit (ERC) How to Claim the Employee Retention Credit FAQs, visit the official IRS.gov tax website.

Conclusion and Summary on ERC Credit FAQ #77c. If a common law employer uses a third-party payer for only a portion of its workforce, should the employer list the third-party payer on the Form 7200?

The “If a common law employer uses a third-party payer for only a portion of its workforce, should the employer list the third-party payer on the Form 7200?” is Frequently Asked Question #77c of many commonly asked questions small business owners are wondering about how to file the Employee Retention Tax Credit (ERTC). The IRS ERC Tax Credit program is a confusing and complex process to determine the correct ERC calculations your business qualifies for. Answers to “If a common law employer uses a third-party payer for only a portion of its workforce, should the employer list the third-party payer on the Form 7200?” and filling out form 941-X may change slightly from frequently updated rules and regulations from the IRS. Leave a comment below if you have further questions on ERC Credit FAQ #77c.

Help Completing / Filing / Claiming the Employee Retention Credit (ERC)

Receive Up to a $26,000 ERC Credit from the IRS Per Employee

Disaster Loan Advisors can assist your business with the complex and confusing Employee Retention Credit (ERC), Form 941-X, and the Employee Retention Tax Credit (ERTC) program. 

Depending on eligibility, business owners and companies can receive up to $26,000 per employee based on the number of W2 employees you had on the payroll in 2020 and 2021.

The ERC / ERTC Tax Credit Program is a valuable IRS tax credit you can claim. This is money you have already paid to the IRS in payroll taxes for your W2 employees.

We DO NOT charge a percentage (%) of your ERC Refund like some companies are charging. Some ERC firms out there are charging upwards of 15% to 35% of your ERC refund!

Our professional ERC fee and pricing structure is very reasonable in comparison.

If you are looking for an ERC Company that believes in providing professional ERC Services and value, in exchange for a fair, reasonable, and ethical fee for the amount of work required, Disaster Loan Advisors is a good fit for you. 

Schedule Your Free Employee Retention Credit Consultation to see what amount of employee retention tax credit your company qualifies for.

Cover Image Credit: Irs.gov / ERC FAQ / Disaster Loan Advisors.

Mark Monroe
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