Page 41 - IRS Business Tax Credits Guide

11:02 - 7-Jan-2022
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Fileid: … ns/i8845/202201/a/xml/cycle07/source
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
employees during the tax year. An employee isn’t a Partnerships, S corporations, cooperatives, estates,
qualified employee if the total amount of wages paid or and trusts report the above credits on line 5. All other filers
incurred by the employer to the employee during the tax figuring a separate credit on earlier lines also report the
year (whether or not for services within an Indian above credits on line 5. All others not using earlier lines to
reservation) exceeds $50,000. figure a separate credit can report the above credits
Line 2 directly on Form 3800, Part III, line 1g, and not file Form
8845.
Enter the total qualified wages and qualified employee Line 7
health insurance costs paid or incurred by the employer
(or predecessor) for qualified employees during calendar Cooperatives. A cooperative described in section
year 1993 (as if section 45A had been in effect during 1381(a) must allocate to its patrons the credit in excess of
1993). If none, enter zero. For this purpose, an employee its tax liability limit. Therefore, to figure the unused amount
isn’t a qualified employee if the total amount of wages of the credit allocated to patrons, the cooperative must
paid or incurred by the employer to the employee during first figure its tax liability. While any excess is allocated to
calendar year 1993 (whether or not for services within an patrons, any credit recapture applies as if the cooperative
Indian reservation) exceeds $30,000. had claimed the entire credit.
Line 4 If the cooperative is subject to the passive activity rules,
In general, you must reduce your deduction for salaries include on line 5 any Form 8845 credit from passive
and wages by the amount on line 4, even if you can’t take activities disallowed for prior years and carried forward to
the full credit this year because of the tax liability limit. If this year. Complete Form 8810, Corporate Passive
you capitalized any salaries and wages on which you Activity Loss and Credit Limitations, to determine the
figured the credit, reduce the amount capitalized by the allowed credit that must be allocated to patrons. For
amount attributable to these costs. details, see the Instructions for Form 8810.
Line 5 Estates and trusts. Allocate the Indian employment
credit on line 6 between the estate or trust and the
Enter the total Indian employment credits from the beneficiaries in the same proportion as income was
appropriate box of: allocated and enter the beneficiaries’ share on line 7.
• Schedule K-1 (Form 1065), Partner’s Share of Income, If the estate or trust is subject to the passive activity
Deductions, Credits, etc., box 15 (code P); rules, include on line 5 any Form 8845 credit from passive
• Schedule K-1 (Form 1120-S), Shareholder’s Share of activities disallowed for prior years and carried forward to
Income, Deductions, Credits, etc., box 13 (code P); this year. Complete Form 8582-CR, Passive Activity
• Schedule K-1 (Form 1041), Beneficiary’s Share of Credit Limitations, to determine the allowed credit that
Income, Deductions, Credits, etc., box 13 (code L); or must be allocated between the estate or trust and the
• Form 1099-PATR, Taxable Distributions Received beneficiaries. For details, see the Instructions for Form
From Cooperatives, box 12 (box 11 for 2019; box 10 8582-CR.
before 2019), or other notice of credit allocation.

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Instructions for Form 8845 (Rev. 01-2022) -3-