Form 7208 Explained: A Quick Guide You Can’t Miss

• What is a Form 7208?

• How much is the stock repurchase excise tax?

• When is the deadline for filing Form 7208?

• An overview and brief explanation of Form 7208

Each of these sections will help clarify the purpose, tax implications, and filing requirements associated with Form 7208, ensuring you are well-informed on this subject.

Form 7208 is used by corporations to calculate the excise tax on stock repurchases. Under the IRS regulation in Section 4501 (the stock repurchase excise tax), certain corporations, known as "covered corporations," are required to file this excise tax for any stock repurchases made during the tax year.

The filing deadline for Form 7208 varies based on the corporation’s tax year. According to the final IRS regulations:

• For taxable years that end after December 31, 2022, and on or before June 28, 2024, the due date for filing Form 7208 is October 31, 2024.

• For taxable years ending after June 28, 2024, the excise tax return must be filed using Form 7208 along with Form 720, and it is due by the filing deadline for Form 720 for the first full calendar quarter following the end of the corporation's tax year.

Examples:

1. Corporation with a calendar year-end on December 31, 2023:
   The corporation must file a single Form 720 along with Form 7208 for the 2023 tax year. The due date is October 31, 2024. For the next tax year ending December 31, 2024, the filing is due by April 30, 2025.

2. Corporation with a March 31 year-end:
   The corporation must file a single Form 720 but include two Forms 7208—one for the tax year ended March 31, 2023, and another for the tax year ended March 31, 2024. The Form 720 and both Forms 7208 are due by October 31, 2024. The filing for the following tax year ending March 31, 2025, is due by July 31, 2025.

3. Corporation with a June 30 year-end:
   The corporation must file a Form 720 and Form 7208 for the tax year ending June 30, 2023, and a separate Form 720 and Form 7208 for the tax year ending June 30, 2024. Both filings are due by October 31, 2024. For the next tax year ending June 30, 2025, the filing is due by October 31, 2025.

Covered corporations are required to maintain accurate records of stock repurchases, exceptions, and adjustments to support their stock repurchase excise tax return.

1. Basic Information:
   Enter the corporation's name, Employer Identification Number (EIN), and the tax year for which Form 7208 is being filed.

Source: Form 7208 PDF

2. Part 1 – Stock Repurchase Details:
   This section requires detailed information about the repurchased stock, including the type of transactions, stock symbol, number of shares, and the fair market value (FMV) of the repurchased stock.

3. Part 2 – Exception to the Stock Repurchase:
   If any exceptions apply to the stock repurchase, they must be reported in this section.

4. Part 3 – Employer-Sponsored Retirement Plans:
   If any shares were contributed to an employer-sponsored retirement plan, provide those details in this section.

5. Part 4 – Stock Issued to Employees:
   Enter information about any stock issued or provided to employees as part of their compensation or benefits.

6. Part 5 – Tax Calculation:
   Based on the information provided in the earlier sections, this part determines the excise tax owed for the stock repurchase.

Form 7208 must be attached to Form 720, where IRS number 150 corresponds to the "Repurchase of corporate stock" tax liability.

Manual filing is quite challenging since you need to complete both Form 7208 and Form 720.

File your Form 7208 online in a few steps and receive your receipts in a few minutes. We are an IRS-authorized Form 7208 submission portal. 

You can complete the filing in less than 5 minutes without a CPA or an ERO. Our customer care team assists you in case of any queries.