Form 8932 Credit for Employer Differential Wage Payments

Form

8932

(Rev. December 2012)
Department of the Treasury
Internal Revenue Service
Name(s) shown on return

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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,
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) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cooperatives, estates, and trusts, subtract line 5 from line 4. Report this amount on Form 3800,
line 1w . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

General Instructions
Section references are to the Internal Revenue Code.

What's New
The credit has been extended to cover eligible differential
wage payments made in 2012 and 2013.

Purpose of Form
An eligible small business employer (defined below) can
use Form 8932 to claim the credit for employer differential
wage payments. Only eligible differential wage payments
made to qualified employees after 2008 and before 2014
can be used to figure 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 reported on Form
3800, General Business Credit.
Taxpayers (other than partnerships, S corporations,
cooperatives, 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 Form 3800.
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.
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.

For Paperwork Reduction Act Notice, see instructions.

Attachment
Sequence No. 161

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Differential Wage Payment
To be considered a differential wage payment, the
payment must be paid after 2008 and before 2014 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.
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 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.12-2012)

Form 8932 (Rev. 12-2012)

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 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.
If the cooperative is subject to the passive activity
rules, include on line 3 any work opportunity 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.

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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 credit for employer differential
wage payments 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.