Instructions For Form 8845 - Indian Employment Credit

2014

Department of the Treasury

Internal Revenue Service

Instructions for Form 8845

Indian Employment Credit

Section references are to the Internal Revenue Code

office. Employers should retain a copy of the proof of

unless otherwise noted.

enrollment status provided by the employee.

Future Developments

2. Substantially all the services performed by the

employee for the employer are performed within an Indian

For the latest information about developments related to

reservation (defined below).

Form 8845 and its instructions, such as legislation

3. The employee's principal residence while

enacted after they were published, go to

performing such services is on or near the reservation

form8845.

where the services are performed.

What's New

However, the employee shall be treated as a qualified

The Indian employment credit was extended for qualified

employee for any tax year only if more than 50% of the

wages and health care costs paid or incurred in tax years

wages paid or incurred by the employer to the employee

beginning in 2014.

during the tax year are for services performed in the

employer's trade or business. Each member of a

General Instructions

controlled group must meet this requirement

independently. Also, see the instructions for lines 1 and 2.

Purpose of Form

The following are not qualified employees.

Employers of American Indians who are qualified

Any individual who bears any of the relationships

employees use Form 8845 to claim the Indian

described in sections 152(d)(2)(A) through 152(d)(2)(G)

employment credit.

to, or is a dependent described in section 152(d)(2)(H) of,

the employer.

Partnerships, S corporations, cooperatives, estates,

If the employer is a corporation, any individual who

and trusts must file this form to claim the credit. All other

bears any of the relationships described in sections

filers are not required to complete or file this form if their

152(d)(2)(A) through 152(d)(2)(G) to, or is a dependent

only source for this credit is a partnership, S corporation,

described in section 152(d)(2)(H) of, an individual who

cooperative, estate, or trust. Instead, they can report this

owns (or is considered to own under section 267(c)) more

credit directly on line 1g in Part III of Form 3800, General

than 50% in value of the outstanding stock of the

Business Credit.

corporation.

Definitions

If the employer is an estate or trust, any individual who

is a grantor, beneficiary, or fiduciary of the estate or trust

Qualified wages means any wages paid or incurred by

(or a dependent, as described in section 152(d)(2)(H), of

an employer for services performed by an employee while

that individual), or any individual who is a relative, as

such employee is a qualified employee (see below). It

described in sections 152(d)(2)(A) through 152(d)(2)(G),

does not include wages attributable to services rendered

of the grantor, beneficiary, or fiduciary of the estate or

during the 2-year period beginning with the day the

trust.

employee starts work for the employer if any portion of

If the employer is other than a corporation, estate, or

such wages is used in figuring the work opportunity credit

trust, any individual who owns directly or indirectly more

on Form 5884. Wages has the same meaning given in

than 50% of the capital and profits interest, including

section 51.

constructive ownership, in the entity.

Qualified employee health insurance costs means

If the employer is a corporation, any person who owns

any amount paid or incurred by an employer for health

(or is considered to own under section 318) more than 5%

insurance coverage for an employee while the employee

of the outstanding or voting stock of the employer or, if not

is a qualified employee. Do not include amounts paid or

a corporate employer, more than 5% of the capital or

incurred for health insurance under a salary reduction

profits interest in the employer.

agreement.

Any individual who performs services involving the

Qualified employee means, for any tax period, any

conduct of Class I, II, or III gaming, as defined in section 4

employee who meets all three of the following tests.

of the Indian Gaming Regulatory Act, and any individual

performing any services in a building housing such

1. The employee is an enrolled member, or the

gaming activity.

spouse of an enrolled member, of an Indian tribe. Each

tribe determines who qualifies for enrollment and what

Indian tribe means any Indian tribe, band, nation,

documentation, if any, is issued as proof of enrollment

pueblo, or other organized group or community, including

status. Examples of appropriate documentation will vary

any Alaska Native village or regional or village

from one tribe to another and may include a tribal

corporation, as defined in, or established under, the

membership card, Certified Degree of Indian Blood

Alaska Native Claims Settlement Act, that is recognized

(CDIB) card, or letter from the tribe or tribal enrollment

as eligible for the special programs and services provided

Feb 03, 2015

Cat. No. 66389C

Instructions For Form 8845 - Indian Employment Credit - 2014

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