Page 39 - IRS Business Tax Credits Guide

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Instructions for Form 8845 Department of the Treasury
Internal Revenue Service
(Rev. January 2022)
Indian Employment Credit
Section references are to the Internal Revenue Code cooperative, estate, or trust. Instead, they can report this
unless otherwise noted. credit directly on Form 3800, General Business Credit.
Future Developments Qualified Wages
For the latest information about developments related to
Form 8845 and its instructions, such as legislation Qualified wages means any wages paid or incurred by an
enacted after they were published, go to employer for services performed by an employee while
IRS.gov/Form8845. such employee is a qualified employee (see below). It
What’s New doesn’t include wages attributable to services rendered

Credit extension. The Taxpayer Certainty and Disaster during the 1-year period (if applicable, 2-year period if
employee is a long-term family assistance recipient under
Tax Relief Act of 2020 extended the Indian employment section 51) beginning with the day the employee starts
credit to cover qualified wages and qualified employee work for the employer if any portion of such wages is used
health insurance costs paid or incurred in tax years in figuring the work opportunity credit on Form 5884.
beginning in 2021. Wages has the same meaning given in section 51. See
Coronavirus-related employee retention credit. You section 45A(b)(1) for details.
may claim an employee retention credit on an Qualified wages do not include:
employment tax return such as Form 941, Employer's • Wages paid to or incurred for any employee after
QUARTERLY Federal Tax Return. Wages paid after December 31, 2020, and before July 1, 2021, if you use
December 31, 2020, and before July 1, 2021, and used to the same wages to claim the employee retention credit on
figure this coronavirus-related employee retention credit an employment tax return such as Form 941;
can't also be used to figure a credit on Form 8845. See • Wages paid to or incurred for any employee after March
Qualified Wages. 31, 2021, and before October 1, 2021, if you use the
Credit for qualified sick and family leave wages. You same wages to claim the credit for qualified sick and
may claim a credit for qualified sick and family leave family leave wages on an employment tax return such as
wages on an employment tax return such as Form 941. Form 941; and
Wages paid after March 31, 2021, and before October 1, • Wages paid to or incurred for any employee generally
2021, and used to figure that credit, can't also be used to after December 27, 2019, and before April 17, 2021, if you
figure a credit on Form 8845. See Qualified Wages. use the same wages to claim the 2020 qualified disaster
employee retention credit on Form 5884-A.
Disaster-related employee retention credit. You may Information about any future disaster credits that
claim a 2020 qualified disaster employee retention credit reduce qualified wages may be posted under "Recent
on Form 5884-A, Employee Retention Credit for Developments" at IRS.gov/Form8845.
Employers Affected by Qualified Disasters. Wages used
to figure that disaster-related employee retention credit Qualified Employee Health Insurance
can't also be used to figure a credit on Form 8845. See Costs
Qualified Wages.
Employee retention credit. Wages paid after June 30, Qualified employee health insurance costs means any
2021, and before January 1, 2022, and used to figure the amount paid or incurred by an employer for health
Indian employment credit can’t also be used to figure a insurance coverage for an employee while the employee
coronavirus-related employee retention credit. is a qualified employee. Don’t include amounts paid or
General Instructions incurred for health insurance under a salary reduction
agreement.

Purpose of Form Qualified Employee
Use Form 8845 to claim the Indian employment credit if Qualified employee means, for any tax period, any
you paid or incurred qualified wages and/or qualified employee who meets all three of the following tests.
employee health insurance costs to/for a qualified 1. The employee is an enrolled member, or the
employee during your tax year. spouse of an enrolled member, of an Indian tribe. Each
Partnerships, S corporations, cooperatives, estates, tribe determines who qualifies for enrollment and what
documentation, if any, is issued as proof of enrollment
and trusts must file this form to claim the credit. All others status. Examples of appropriate documentation will vary
aren’t required to complete or file this form if their only from one tribe to another and may include a tribal
source for this credit is a partnership, S corporation, membership card, Certified Degree of Indian Blood
(CDIB) card, or letter from the tribe or tribal enrollment

Jan 07, 2022 Cat. No. 66389C