SayPro Previous Tax Filings:Copies of the client’s previous tax filings to assess past claims for employment tax credits.

When assessing a client’s previous tax filings to evaluate their eligibility for employment tax credits, you’ll typically need to review the following documents and details from past filings. These documents help ensure that the client has properly claimed credits and also aid in identifying any potential claims they may have missed or are eligible for based on current tax laws.

SayPro Previous Tax Filings: Copies of the Client’s Previous Tax Filings for Employment Tax Credits

1. Form 941 (Employer’s Quarterly Federal Tax Return)

• Purpose: This form is filed quarterly by employers to report income taxes, Social Security, and Medicare taxes withheld from employee wages, as well as the employer’s portion of Social Security and Medicare taxes.
• Key Sections to Review:
  • Part 1: Employment Taxes – Review wages subject to federal income tax withholding and employment tax credits (such as the Employee Retention Credit (ERC), if applicable).
  • Part 2: Tax Liability for the Quarter – Verify if the client paid the correct amount of tax and if any credits (like the ERC or Paid Sick Leave Credits) were claimed.
  • Schedule B: Details of tax deposits and payments.
• Employment Tax Credit Claim: Check whether the client claimed employment tax credits (like ERC or Family and Medical Leave Act (FMLA) credits) during the relevant quarters.

2. Form 944 (Employer’s Annual Federal Tax Return)

• Purpose: Some small employers may file Form 944 instead of Form 941 to report and pay employment taxes annually instead of quarterly. This form summarizes the year’s wages, taxes, and credits.
• Key Sections to Review:
  • Line 1: Total wages, tips, and other compensation.
  • Line 5: Total taxes owed, including Social Security and Medicare taxes.
  • Line 6: The portion of taxes related to employee retention or other eligible tax credits.
  • Schedule B: Similar to Form 941, Schedule B records any adjustments or credits.
• Employment Tax Credit Claim: This form will provide insight into the total amount of tax credits claimed annually, including for employment retention or family leave programs.

3. Form 7200 (Advance Payment of Employer Credits Due to COVID-19)

• Purpose: Used by employers to request advance payments of employment tax credits (e.g., Employee Retention Credit (ERC) or Paid Sick and Family Leave Credits) during the COVID-19 pandemic.
• Key Sections to Review:
  • Line 1: Total advance requested for credits.
  • Line 2-5: Breakdown of the Employee Retention Credit (ERC), sick leave, and family leave credits for which the client applied.
  • Total Amount: Ensure the client requested only the appropriate amount based on eligible wages.
• Review for COVID-19-Related Claims: Verify if the client claimed any ERC or sick leave credits during 2020 or 2021, which may still be eligible for retroactive claims or amendments.

4. Form 1065 (U.S. Return of Partnership Income) or Form 1120 (U.S. Corporation Income Tax Return)

• Purpose: Used by partnerships (Form 1065) and corporations (Form 1120) to report income, deductions, and credits, including any employment tax credits claimed for employees.
• Key Sections to Review:
  • Schedule K: Partnership or corporation-level deductions and credits. Look for ERC and other employment-related credits listed here.
  • Schedule K-1 (for partnerships): Provides details of the partner’s share of the credit.
  • Part I – Income Statement: Review for wages, income, and associated tax credits that could qualify for tax relief.
• Review for Employment Tax Credit Claims: Look for ERC claims, any tax credits for employees, or information related to employee compensation.

5. Form 5884 (Work Opportunity Credit)

• Purpose: This form is used by employers to claim the Work Opportunity Tax Credit (WOTC), which incentivizes employers to hire individuals from certain target groups, such as veterans or people with disabilities.
• Key Sections to Review:
  • Line 1-3: Number of employees from targeted groups hired.
  • Line 5: Total credit claimed.
• WOTC Claims: Review whether the client has applied for and received WOTC credits in prior years and check the eligibility of new hires in the relevant period.

6. Form 8862 (Information to Claim Earned Income Credit After Disallowance)

• Purpose: If the client or employees are eligible for Earned Income Tax Credit (EITC), this form may be required after a previous disallowance. This is relevant in cases where the client or their employees claimed credits based on income.
• Key Sections to Review:
  • Section 1: Basic information about previous tax filings that were denied or disallowed.
• EITC Review: Ensure that the client properly claimed and was eligible for the EITC in prior years.

7. State Tax Filings

• State-Specific Tax Returns: Depending on the state, there may be additional tax forms related to state employment credits, such as state-specific Employee Retention Credits, Work Opportunity Credits, or other regional tax credits.
• Key Forms to Review:
  • State Quarterly Employment Reports: Similar to Form 941, these forms report state income and employment taxes.
  • State-Level Tax Credit Claims: Many states have their own employment tax credits for new hires, job creation, or pandemic-related relief.

8. Supporting Documentation for Tax Credit Claims

• Employee W-2 Forms: Review W-2 forms to verify wages, withheld taxes, and employee eligibility for credits like ERC or Paid Family and Sick Leave credits.
• Employee Records: Review payroll records, including hours worked, wages, and any bonuses or other forms of compensation, to ensure they match the tax credit claims.
• Documentation for Eligibility: If the client claims credits like the ERC or Paid Leave credits, they will need to provide proof that employees were eligible (e.g., furloughed employees, employees affected by COVID-19 restrictions).

---

Steps to Assess Employment Tax Credits from Previous Tax Filings

1. Collect Copies of Tax Forms: Gather all relevant tax documents, including Forms 941, 944, 1065, 1120, and any forms related to credits (e.g., Form 7200 or 5884).
2. Review Past Credit Claims: Examine past filings to determine if the client has claimed eligible employment tax credits such as the ERC, WOTC, or other related credits.
3. Verify Accuracy: Ensure the wages, hours worked, and eligibility criteria match the claimed credits. Any discrepancies or missing information could indicate missed opportunities for additional credits.
4. Identify Opportunities for Retroactive Claims: Check for any unclaimed credits that the client may be eligible for, especially ERC claims for prior quarters or years (as IRS guidance allows retroactive claims).
5. Consult with a Tax Professional: If you identify any inconsistencies or missing claims, it may be beneficial to work with a tax advisor to amend past returns and claim any credits the client is entitled to.

By reviewing these tax filings, you can help ensure that the client has properly claimed all available employment tax credits and is compliant with tax laws while potentially uncovering additional credits they may be eligible for.