Free Form 8932 (Rev. December 2008) - Federal

Form

8932

OMB No. 1545-2126

Credit for Employer Differential Wage Payments
Attach to your tax return.
Identifying number Attachment Sequence No.

(December 2008) Department of the Treasury Internal Revenue Service

161

Name(s) shown on return

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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, report this amount on Schedule K; all others, report this amount on Form 3800, line 1w Amount allocated to patrons of the cooperative or beneficiaries of the estate or trust (see instructions) Cooperative, estates, and trusts. Subtract line 5 from line 4. Report this amount on Form 3800, line 1w

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General Instructions
Section references are to the Internal Revenue Code.

Purpose of Form
Use Form 8932 to claim the credit for eligible differential wage payments you made to qualified employees during the tax year. Only differential wage payments made to qualified employees during calendar year 2009 can be used to figure the credit. The credit is available only to eligible small business employers. The credit is 20% of the first $20,000 of differential wage payments paid to each qualified employee. The credit for employer differential wage payments is part of the general business credit reported on Form 3800, General Business Credit. Taxpayers (other than partnerships, S corporations, estates, and trusts) whose only source of this credit is from those pass-through entities are not required to complete or file this form. Instead, report this credit directly on line 1w of the 2008 Form 3800. For details, see section 45P.

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. For purposes of this definition, 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 full-time 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.

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. 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 during calendar year 2009 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.

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.

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. 8932

For Paperwork Reduction Act Notice, see page 2.

Cat. No. 37747W

Form

(12-2008)

Form 8932 (12-2008)

Page

2

Specific Instructions
Line 1 Enter the total of the first $20,000 in differential wage payments made to each qualified employee during the tax year. Line 2 Generally, you must reduce the deductions on your return for salaries and wages by the credit 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 the amount of credit that was allocated to you as a partner, shareholder, patron of a cooperative, or beneficiary. 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. 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 allocated and enter the beneficiaries share on line 5.

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.