Help Center
The COVID tax credit record is an intake form that informs Justworks of payroll tax credits you have claimed without Justworks’ help, either through your previous payroll provider or by submitting the Form 7200 directly to the IRS.
Why is this important?
Justworks needs to know about any tax credits your company claims under the CARES Act or the FFCRA in order to correctly file your taxes. Also, since certain caps apply to the amount of payroll tax credits you can claim under these programs, Justworks needs to know about any credits you claimed outside of Justworks in order to properly adjust caps and credit you on a go forward basis. For context, here are the different programs and their credit caps:
The Employee Retention Tax Credit applies to 50% of qualified wages, including applicable health plan expenses, paid between March 13, 2020 and December 31, 2020. The maximum amount of qualified wages per employee is $10,000 for all of 2020. This allows for a maximum credit of $5,000 for each employee.
The FFCRA has specific caps based on the type and reason for leave. Visit the Help Center to understand how the FFCRA tax credit caps work.
What are the different reasons I might use the COVID tax credit record?
There are multiple situations in which you might need to use the COVID tax credit record. While the majority of information that we will ask you is similar across the cases, there are a few differences that we will highlight later based on the different case.
1. You are a new customer and claimed COVID-19 related payroll tax credits before joining Justworks, either through your previous payroll provider or directly with the IRS.
- The easiest way to record credits is through the direct link you received during onboarding (you can check it out here too).
- You can also enter this information before you opt into the ERTC if you have previous credits to report.
2. You filed the Form 7200 with the IRS while running payroll with Justworks.
Use cases 3 and 4 are AFTER you opted into employee retention tax credit. In these cases, you can access the tax credit record directly from the COVID relief center.
3. You are a company who averaged over 100 employees in 2019 and have claimed Employee Retention Credits using Form 7200. Have questions? Check out the Employee Retention Tax Credit help center article here.
4. You are opted into ERTC and claiming these credits through JW, but have outside wages that you have applied for credits for. In this case, refer to the instructions at the bottom of this article.
How does it work?
The heart of the COVID tax credit record is knowing how much in payroll tax credits PER EMPLOYEE you have claimed.
We’ll need you to provide the following information for each employee for whom you have claimed a payroll tax credit. There are two templates based on the use case.
Template 1: This is the information required for two cases.
- onboarding and existing customers who, either through a previous payroll provider or on their own, already received ERTC credits prior to opting into ERTC on Justworks
- Customers claim ERTC on their own through the Form 7200 because they averaged 101+ employees in 2019.
- First and last name
- Work email
- Reason for tax credit: CARES, FFCRA sick leave-dependent, FFCRA sick leave-self, FFCRA family leave.
- Amount of wages qualified for tax credit
- Amount of tax credits claimed
Template 2: This is the information required for onboarding and existing customers who have ALREADY opted into Employee Retention Tax Credit on Justworks, and are filing a 7200 for wages that Justworks is not counting.
- First and last name
- Work email
- Reason for tax credit: CARES
- Amount of wages qualified for tax credit
- Amount of tax credits claimed
- Type of wage (eg commissions, outside health expenses, etc)
If you have multiple Form 7200s or more than one report from your previous payroll provider, you’ll need to enter the information per supporting document. For example, if you filed 3 different Form 7200s, you’ll have to use this tool 3 times to complete your COVID-19 tax credit record.
Using the Tax Credit Record flow
Once you’ve gotten to the form, you will answer a series of questions so that we can collect the proper information from you.
Did you claim your payroll tax credits through a previous payroll provider or directly with the IRS?
- If you have claimed tax credit through both methods, you can pick one to fill out first and fill another one afterwards.
- If you have filed multiple Form 7200, you will need to submit the information one by one.
1. Credits processed by a previous payroll provider
Before completing this next step, we encourage you to reach out to your previous payroll provider to obtain the required information. Ideally, they will provide you information with a quarterly break down, but if not, that's ok too. If they need guidance, you can send them the columns of the template so they have an idea of what they need to provide you on an employee by employee basis.
If you’re not able to contact your previous provider, you will still be able to move forward, but you’ll need to obtain the required information on your own.
Next, you’ll need to upload a CSV with the required information. There is more information above on the CSV templates we require.
2. Credits received directly from the IRS
Based on if you were running payroll with a different payroll provider or with Justworks impacts the information we need from you.
Different payroll provider.
If a different payroll provider, all we need is the date that you filed the 7200 (optional), and the applicable CSV.
Submitted Form 7200 when running payroll with Justworks.
We need the exact information you entered on the Form 7200 to better understand your tax credits. After filling in each line, you need to upload a copy of the Form 7200.
Find lines 1–8 in Part II on your Form 7200 and enter the dollar amounts in Justworks so they match your form. If Lines 4, 7, or 8 do not match your Form 7200, reach out to support@justworks.com for help.
- Total employee retention credit for the quarter.
- Total qualified sick leave wages eligible for the credit and paid this quarter.
- Total qualified family leave wages eligible for the credit and paid this quarter.
- Sum of Lines 1-3. We will calculate this for you!
- Total amount by which you have already reduced your federal employment tax deposits for these credits for this quarter
- Total advanced credits requested on previous filings of this form for this quarter 6 7
- Sum of lines 5 and 6
- Advance requested. Subtract line 7 from line 4.
What to do when you have multiple 7200s to submit?
Before you submit, you’ll have the opportunity to state if you have more 7200s to report.
If you do have more to submit, you’ll be taken to the learn page where you can see all your 7200 submissions and can easily submit another 7200.
Anytime you want to see a record of your submission, you can always return to the COVID tax credit record learn page. For submissions where you had a copy of the 7200, you’ll be able to link directly to a copy of that 7200 (that is stored in the document center).
Tax Credit Record Submissions POST Employee Retention Tax Credit Opt in
We have outlined four scenarios in which you might submit a 7200 to the IRS after you have gone through the Justworks ERTC opt-in flow. Anytime that you submit a 7200 when Justworks is running payroll for you, you will need to provide us all form 7200 information that is outlined in the 7200 section here (hyperlink to the form 7200).
Note: After you’ve opt into the ERTC, we will only be allowing you to submit CARES credits, and not FFCRA credits. If you need to report on past FFCRA credits at this stage, please reach out to CS.
Navigate to the COVID relief page and below the FFCRA section you’ll see this:
Click in to the Tax Credit page, proceed to get started and you’ll be presented with the following options.
Choose the reason for filing Form 7200.
The top two options we support directly in Justworks, and the bottom two options you’ll need to reach out to CS.
1. ERTC over 101 EEs
You’ll need to fill out the CSV with the relevant information around CARES credits per employee as well as submit 7200 information. As a refresher on what you’ll need to include, check out the template information here (anchor link to the pre-ERTC template info).
2. For ERTC credits that you are filing directly with the IRS.
If you claimed ERTCs directly from the IRS for wages that Justworks did not include in its credit calculations, , like commissions or outside health expenses, please submit all 7200 information. For a refresher on the information you’ll need to include (the biggest difference being we need to know what type of wage you’re requesting credits for), check out the template information here (anchor link to the post-ERTC template info).
If you choose “Claimed end-of-quarter cares retention tax credits from the IRS” or “Claimed a COVID-19 related payroll tax credit for another reason” you will need to contact support@justworks.com to proceed.
Disclaimer
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.