Federal Credit for Employer Differential Wage Payments
Extracted from PDF file 2016-federal-form-8932.pdf, last modified January 2016
Credit for Employer Differential Wage PaymentsForm 8932 (Rev. January 2016) Department of the Treasury Internal Revenue Service Name(s) shown on return 1 2 3 4 5 6 OMB No. 1545-2126 Credit for Employer Differential Wage Payments ▶ ▶ Attach to your tax return. Information about Form 8932 and its instructions is at www.irs.gov/form8932. Identifying number Eligible differential wage payments paid during the tax year (see instructions) . . . . . . . Multiply line 1 by 20% (.20) (see instructions for the adjustment you must make) . . . . . . Credit for employer differential wage payments from partnerships, S corporations, cooperatives, estates, and trusts (see instructions) . . . . . . . . . . . . . . . . . . . . . Add lines 2 and 3. Cooperatives, estates, and trusts, go to line 5. Partnerships and S corporations, stop here and report this amount on Schedule K. All others, stop here and report this amount on Form 3800, Part III, line 1w . Amount allocated to patrons of the cooperative or beneficiaries of the estate or trust (see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cooperatives, estates, and trusts, subtract line 5 from line 4. Report this amount on Form 3800, Part III, line 1w . . . . . . . . . . . . . . . . . . . . . . . . . . . . General Instructions Section references are to the Internal Revenue Code unless otherwise noted. Future Developments For the latest information about developments related to Form 8932 and its instructions, such as legislation enacted after they were published, go to www.irs.gov/form8932. What's New • The credit has been extended to cover eligible differential wage payments made after 2014. • For tax years beginning after 2015, employers who are not eligible small business employers can claim this credit. Purpose of Form Use Form 8932 to claim the credit for eligible differential wage payments made to qualified employees after 2008. For tax years beginning before 2016, you must be an eligible small business employer (defined later) to claim the credit. The credit is 20% of up to $20,000 of differential wage payments paid to each qualified employee during the tax year. The credit for employer differential wage payments is part of the general business credit. Partnerships, S corporations, cooperatives, estates, and trusts must file this form to claim the credit. All other taxpayers are not required to complete or file this form if their only source for this credit is a partnership, S corporation, cooperative, estate, or trust. Instead, they can report this credit directly on Form 3800, General Business Credit. For details, see section 45P and Notice 2010-15, 2010-6 I.R.B. 390, available at www.irs.gov/irb/2010-06_IRB/ar09.html. Definitions Eligible Differential Wage Payments Eligible differential wage payments are the total differential wage payments paid to the employee for the tax year, up to $20,000. For Paperwork Reduction Act Notice, see instructions. Attachment Sequence No. 161 1 2 3 4 5 6 Qualified Employee A qualified employee is an employee of an eligible small business employer for the 91-day period immediately preceding the period for which any differential wage payment is made. Differential Wage Payment To be considered a differential wage payment, the payment must be paid after 2008 and meet both of the following requirements. • The payment is made by an eligible small business employer to a qualified employee for any period during which the employee is performing service in the uniformed services of the United States while on active duty for a period of more than 30 days. • The payment represents all or a portion of the wages the employee would have received from the employer if the employee were performing services for the employer. Eligible Small Business Employer An eligible small business employer means any taxpayer that: • Employed on average fewer than 50 employees on business days during the tax year, and • Under a written plan of the employer, provides eligible differential wage payments to every qualified employee of the employer. Controlled Groups All persons treated as a single employer under subsection (b), (c), (m), or (o) of section 414 are treated as a single employer. Uniformed Services Uniformed services means the Armed Forces; the Army National Guard and the Air National Guard when engaged in active duty for training, inactive duty training, or fulltime National Guard duty; the commissioned corps of the Public Health Service; and any other category of persons designated by the President in time of war or national emergency. Coordination With Other Credits The amount of any research credit or orphan drug credit otherwise allowable for compensation paid to any employee is reduced by the credit for differential wage payments figured for that employee. Cat. No. 37747W Form 8932 (Rev. 1-2016) Form 8932 (Rev. 1-2016) Disallowance for Failure To Comply With Employment or Reemployment Rights of Members of the Reserve Components of the Armed Forces of the United States No credit will be allowed to a taxpayer for: • Any tax year beginning after June 17, 2008, in which the taxpayer is under a final order, judgment, or other process issued or required by a district court of the United States under section 4323 of title 38 of the United States Code with respect to a violation of chapter 43 of title 38; and • The two succeeding tax years. Specific Instructions Line 1 Enter the total amount of eligible differential wage payments made to qualified employees during the tax year. Do not include more than $20,000 of payments for any employee. Line 2 Generally, you must reduce your deduction for salaries and wages by the amount on line 2, even if you cannot take the full credit this year because of the tax liability limit. If you capitalized any costs on which you figured the credit, reduce the amount capitalized by the credit attributable to these costs. Line 3 Enter total credits for employer differential wage payments from: • Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc., box 15 (code P); • Schedule K-1 (Form 1120S), Shareholder's Share of Income, Deductions, Credits, etc., box 13 (code P); • Schedule K-1 (Form 1041), Beneficiary's Share of Income, Deductions, Credits, etc., box 13 (code Q); or • Form 1099-PATR, Taxable Distributions Received From Cooperatives, box 10, or other notice of credit allocation. Partnerships, S corporations, cooperatives, estates, and trusts must always report the above credits on line 3. All other filers figuring a separate credit on earlier lines must also report the above credits on line 3. All others not using earlier lines to figure a separate credit can report the above credits directly on Form 3800, Part III, line 1w. Line 5 Cooperatives. A cooperative described in section 1381(a) must allocate to its patrons the credit in excess of its tax liability limit. Therefore, to figure the unused amount of the credit allocated to patrons, the cooperative must first figure its tax liability. While any excess is allocated to patrons, any credit recapture applies as if the cooperative had claimed the credit. Page 2 If the cooperative is subject to the passive activity rules, include on line 3 any Form 8932 credit from passive activities disallowed for prior years and carried forward to this year. Complete Form 8810, Corporate Passive Activity Loss and Credit Limitations, to determine the allowed credit that must be allocated to patrons. For details, see the Instructions for Form 8810. Estates and trusts. Allocate the credit for employer differential wage payments on line 4 between the estate or trust and the beneficiaries in the same proportion as income was allocated and enter the beneficiaries' share on line 5. If the estate or trust is subject to the passive activity rules, include on line 3 any Form 8932 credit from passive activities disallowed for prior years and carried forward to this year. Complete Form 8582-CR, Passive Activity Credit Limitations, to determine the allowed credit that must be allocated between the estate or trust and the beneficiaries. For details, see the Instructions for Form 8582-CR. Paperwork Reduction Act Notice. We ask for the information on this form to carry out the Internal Revenue laws of the United States. You are required to give us the information. We need it to ensure that you are complying with these laws and to allow us to figure and collect the right amount of tax. You are not required to provide the information requested on a form that is subject to the Paperwork Reduction Act unless the form displays a valid OMB control number. Books or records relating to a form or its instructions must be retained as long as their contents may become material in the administration of any Internal Revenue law. Generally, tax returns and return information are confidential, as required by section 6103. The time needed to complete and file this form will vary depending on individual circumstances. The estimated burden for individual taxpayers filing this form is approved under OMB control number 1545-0074 and is included in the estimates shown in the instructions for their individual income tax return. The estimated burden for all other taxpayers who file this form is shown below. Recordkeeping . . . . . . . . . . 1 hr., 54 min. Learning about the law or the form . . . . . . . . . . . . 30 min. Preparing and sending the form to the IRS . . . . . . . . . . . . . . 33 min. If you have comments concerning the accuracy of these time estimates or suggestions for making this form simpler, we would be happy to hear from you. See the instructions for the tax return with which this form is filed.
Form 8932 (Rev. January 2016)
More about the Federal Form 8932 Other Tax Credit TY 2016
We last updated the Credit for Employer Differential Wage Payments in May 2017, so this is the latest version of Form 8932, fully updated for tax year 2016. You can download or print current or past-year PDFs of Form 8932 directly from TaxFormFinder. You can print other Federal tax forms here.
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The Internal Revenue Service usually releases income tax forms for the current tax year between October and January, although changes to some forms can come even later. We last updated Federal Form 8932 from the Internal Revenue Service in May 2017.
Form 8932 is a Federal Other form. States often have dozens of even hundreds of various tax credits, which, unlike deductions, provide a dollar-for-dollar reduction of tax liability. Some common tax credits apply to many taxpayers, while others only apply to extremely specific situations. In most cases, you will have to provide evidence to show that you are eligible for the tax credit, and calculate the amount of the credit to which you are entitled.
Historical Past-Year Versions of Federal Form 8932
We have a total of four past-year versions of Form 8932 in the TaxFormFinder archives, including for the previous tax year. Download past year versions of this tax form as PDFs here:
Form 8932 (Rev. January 2016)
Form 8932 (Rev. January 2016)
Form 8932 (Rev. December 2012)
Form 8932 (Rev. December 2010)
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