7220
Prevailing Wage and Apprenticeship (PWA) Verification and Corrections
Form 7220, Prevailing Wage and Apprenticeship (PWA) Verification and Corrections, is listed as a new form in its instructions. The instructions say it is used to report information for each facility for which increased credit or deduction amounts are claimed for satisfying certain PWA requirements, and to calculate any penalties for failing to satisfy those requirements. For these instructions, a facility also includes a property, project, technology, equipment or residence.
The increased amounts themselves are claimed on other forms: Form 3468, Form 7205, Form 7210, Form 7211, Form 7213, Form 7218, Form 8835, Form 8908, Schedule A (Form 8911) and Form 8933. Form 7220 holds the supporting detail: facility dates, wages and fringe benefits paid to laborers and mechanics, apprentice hours, correction payments and any Good Faith Effort Exception. The form says to attach it to the tax return.
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Ten lines: the IRS-issued registration number for an elective payment or transfer election, a description, address and coordinates, the dates construction began and the facility was placed in service, the form claiming the increased amounts, and yes or no questions that point to Parts II to V.
For each entity directly employing laborers and mechanics: name, EIN, labor or work classification, number of workers, total hours, total hourly wages and bona fide fringe benefits, with column (h) adding wages and fringe benefits.
The same entity details for qualified apprentices, plus column (h) for labor hours that did not meet the requirements of IRC 45(b)(8)(A) and (C), and column (i) for the penalty, which is column (h) times $50.
Laborers and mechanics covered by the penalty waiver, those for whom a penalty payment is reported, a penalty of column (e) times $5,000 in column (f), and correction payments and interest paid in column (g).
Apprentices requested in each classification, hours needed to satisfy the Apprenticeship Requirements, hours requested and denied, and boxes for a request that was denied or partially denied, or got no response (deemed denial).
Enter the IRS pre-filing registration number if applicable, a description of the facility, its address and coordinates, the date construction began and the date it was originally placed in service. The form says to enter a plus or minus sign in the first box of each coordinate.
Check Yes on line 5 if the facility was placed in service in the current tax year and complete Parts II and III, though Part III is skipped for Form 8908 or Form 7213, Part II. If No, skip lines 6 and 9. On line 6, check the form claiming the increased amounts.
Answer the questions on a qualifying project labor agreement, correction payments (Yes leads to Part IV), the Good Faith Effort Exception (Yes leads to Part V) and alterations or repairs in the year (Yes leads to Part II). The instructions say a No on line 10 calls for an attached statement that none were performed.
On each row, enter the entity directly employing the workers, its EIN and each labor or work classification as defined by the Davis-Bacon Act. The instructions say to complete as many copies of each part as necessary and carry totals from attached copies to the 'If applicable' line.
In Part III, multiply column (h) by $50 for column (i). In Part IV, multiply column (e) by $5,000 for column (f). The instructions say line 18 of these columns is reported on Form 4255, Part I, columns (p) and (o).
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The form says 'Attach to your tax return.'
When line 10 is No, the instructions call for a statement with the taxpayer's name, taxpayer identification number and facility description, a declaration that no alterations or repairs were performed in the tax year, and a signed penalties of perjury declaration.
The instructions describe correction payments of the wage shortfall plus interest, and a penalty of $5,000 multiplied by the number of laborers and mechanics paid below the prevailing wage rate.
The instructions say the penalty payment is waived if correction payments are made by the last day of the first month after the end of the calendar quarter of the failure, and the failure occurred in less than 10% of pay periods or underpayments were not more than 5% below the prevailing wage rate amount.
If the Good Faith Effort Exception does not apply, the instructions describe a penalty of $50 multiplied by the labor hours for which the labor hours or participation requirement was not satisfied.
The form says to use the amounts in Part III, column (i) and Part IV, column (f) to complete Form 4255.
4255
646 fields, 5 pages
3800
1,921 fields, 9 pages
3468
321 fields, 12 pages
8835
97 fields, 3 pages
8908
294 fields, 3 pages
8933
141 fields, 4 pages
The form is completed by the taxpayer claiming the increased amounts and attached to that taxpayer's return. The instructions describe the cases below.
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No. The form says to attach it to your tax return.
Yes. The instructions say to file a separate Form 7220 for each facility for which increased credit or deduction amounts are claimed.
The instructions say a taxpayer claiming the increased amounts that satisfies the Beginning of Construction (BOC) or One Megawatt exception is not required to file Form 7220.
For the instructions, the term facility also includes property, project, technology, equipment or residence, as applicable.
The instructions say the apprenticeship requirements are deemed satisfied if qualified apprentices were requested from a registered apprenticeship program and the request was denied, or the program did not respond within 5 days. Part V reports those requests.
The form says to use the amounts in Part III, column (i) and Part IV, column (f) to complete Form 4255.