Form 8932 Credit for Employer Differential Wage Payments

8932

Form
(Rev. December 2021)
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.
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Attachment
Sequence No. 161
Identifying number

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 . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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.

Which Revision To Use
Use this December 2021 revision of Form 8932 for tax years
beginning in 2021 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.

What’s New
Differential wage payments. Differential wage payments
don’t include:
• Wage payments made after December 31, 2020, and
before July 1, 2021, if you use the same wage payments to
claim the employee retention credit on an employment tax
return such as Form 941, Employer’s QUARTERLY Federal
Tax Return;
• Wage payments made after March 31, 2021, and before
October 1, 2021, if you use the same wage payments to
claim the credit for qualified sick and family leave wages on
an employment tax return such as Form 941; and
• Wage payments made generally after December 27, 2019,
and before April 17, 2021, if you use the same wage
payments to claim the 2020 qualified disaster employee
retention credit on Form 5884-A, Employee Retention Credit
for Employers Affected by Qualified Disasters.
Employee retention credit. Wages paid after June 30,
2021, and before January 1, 2022, and used to figure the
credit for employer differential wage payments can’t also be
used to figure a coronavirus-related employee retention
credit.

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.
For Paperwork Reduction Act Notice, see instructions.

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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.

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 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.
Differential wage payments don’t include certain
wage payments discussed under What’s New.

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CAUTION

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.

Cat. No. 37747W

Form 8932 (Rev. 12-2021)

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Form 8932 (Rev. 12-2021)

Uniformed Services

Line 5

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.

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 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.

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 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 1120-S), 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, 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.

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 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.