Form 8932 Credit for Employer Differential Wage Payments

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8932

Form
(Rev. December 2019)
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.
Go to www.irs.gov/Form8932 for the latest information.

Attachment
Sequence No. 161
Identifying number

DRAFT AS OF
August 6, 2019
DO NOT FILE
Eligible differential wage payments paid during the tax year (see instructions) . . . . . . .
Multiply line 1 by 20% (0.20). See instructions for the adjustment you must make to your
deduction for salaries and wages . . . . . . . . . . . . . . . . . . . . . .
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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General Instructions

Definitions

Section references are to the Internal Revenue Code
unless otherwise noted.

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.

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.

Which Revision To Use
Use this December 2019 revision of Form 8932 for tax
years beginning in 2019 or later, until a later revision is
issued. Use prior revisions of this form for earlier tax
years. All revisions are available at www.irs.gov/
Form8932.

Purpose of Form
Use Form 8932 to claim the credit for eligible differential
wage payments made to qualified employees after 2008.
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#NOT-2010-15.

Qualified Employee
A qualified employee is a person who has been an
employee 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 meet both of the following requirements.
• The payment is made 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.
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.
For Paperwork Reduction Act Notice, see instructions.

Cat. No. 37747W

Form 8932 (Rev. 12-2019)

Form 8932 (Rev. 12-2019)

Disallowance for Failure To Comply With
Employment or Reemployment Rights of
Members of the Reserve Components of the
Armed Forces of the United States

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.

DRAFT AS OF
August 6, 2019
DO NOT FILE

No credit will be allowed to a taxpayer for:
• Any tax year 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 2 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 12 (box 11 for 2019), or other notice of
credit allocation.
Partnerships, S corporations, cooperatives, estates,
and trusts report the above credits on line 3. All other
filers figuring a separate credit on earlier lines 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.

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
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The time needed to complete and file this form will vary
depending on individual circumstances. The estimated
burden for individual and business taxpayers filing this
form is approved under OMB control number 1545-0074
and 1545-0123 and is included in the estimates shown in
the instructions for their individual and business 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.