Form 8932 Credit for Employer Differential Wage Payments

Form

8932

OMB No. 1545-2126

Credit for Employer Differential Wage Payments

(December 2008)
Department of the Treasury
Internal Revenue Service

©

Attach to your tax return.

Attachment
Sequence No.

1
2

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)

3

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

4
5
6

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.

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.

For Paperwork Reduction Act Notice, see page 2.

161

Identifying number

Name(s) shown on return

1
2
3
4
5
6

● 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.

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.

Cat. No. 37747W

Form

8932

(12-2008)

Form 8932 (12-2008)

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.

Page

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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.