Instructions For Form 8844 - Empowerment Zone Employment Credit - 2015 Page 2

ADVERTISEMENT

See Qualified Employees below for a list of persons
The employee becomes disabled before the 90th day.
who are not qualified employees.
However, if the disability ends before the 90th day, the
employer must offer to reemploy the former employee.
Qualified Employees
An employee is not treated as terminated if the
Any person may be a qualified employee except the
corporate employer is acquired by another corporation
following.
under section 381(a) and the employee continues to be
Any relative of the employer described in sections
employed by the acquiring corporation. Nor is a mere
152(d)(2)(A) through 152(d)(2)(G).
change in the form of conducting the trade or business
A dependent of the employer described in section
treated as a termination if the employee continues to be
152(d)(2)(H).
employed in such trade or business and the taxpayer
If the employer is a corporation, any individual who
retains a substantial interest therein.
bears any of the relationships described in sections
Wages
152(d)(2)(A) through 152(d)(2)(G), or is a dependent, as
described in section 152(d)(2)(H), of an individual who
Wages are defined in section 51(c) and generally are
owns (or is considered to own under section 267(c)) more
wages (excluding tips) subject to the Federal
than 50% in value of the outstanding stock of the
Unemployment Tax Act (FUTA), without regard to the
corporation.
FUTA dollar limitation. The following are also treated as
If the employer is an entity other than a corporation, any
wages.
individual who owns directly or indirectly more than 50%
Amounts paid or incurred by the employer as
of the capital and profits interest, including constructive
educational assistance payments excludable from the
ownership, in the entity.
employee’s gross income under section 127. However,
If the employer is an estate or trust, any individual who
this does not apply if the employee has a relationship to
is a grantor, beneficiary, or fiduciary of the estate or trust
the employer described in section 267(b) or 707(b)(1)
(or a dependent, as described in section 152(d)(2)(H), of
(substituting “10 percent” for “50 percent” in those
such an individual), or any individual who is a relative, as
sections) or the employer and employee are engaged in
described in sections 152(d)(2)(A) through 152(d)(2)(G),
trades or businesses under common control (within the
of the grantor, beneficiary, or fiduciary of the estate or
meaning of sections 52(a) and (b)).
trust.
Amounts paid or incurred by the employer on behalf of
Any person who owns (or is considered to own under
an employee under age 19 for a youth training program
section 318) more than 5% of the outstanding or voting
operated by that employer in conjunction with local
stock of the employer, or if not a corporate employer,
education officials.
more than 5% of the capital or profits interest in the
employer.
Specific Instructions
Any individual employed by the employer for less than
90 days. For exceptions, see Early termination of
Complete lines 1 and 2 to figure the current year credit for
employee, later.
your trade or business. Skip lines 1 and 2 if you are only
Any individual employed by the employer at any private
claiming a credit that was allocated to you from a
or commercial golf course, country club, massage parlor,
pass-through entity.
hot tub facility, suntan facility, racetrack or other facility
Line 1—Qualified Empowerment Zone
used for gambling, or any store the principal business of
which is the sale of alcoholic beverages for consumption
Wages
off premises.
Enter the total qualified empowerment zone wages paid or
Any individual employed by the employer in a trade or
incurred during the calendar year 2015. The credit must
business of which the principal activity is farming (see
be figured using only the wages that you paid or incurred
Note below), but only if at the close of the tax year the
in the calendar year that ended with or within your tax
sum of the following amounts exceeds $500,000.
year. For example, if your tax year began on April 1, 2015,
1. The larger of the unadjusted bases or fair market
and ended on March 31, 2016, you must figure wages
value of the farm assets owned by the employer.
based on the calendar year that began on January 1,
2. The value of the farm assets leased by the
2015, and ended on December 31, 2015. Wages paid
employer.
after the end of the calendar year may be used only to
figure the credit claimed on the following year’s tax return.
Note. Certain farming activities are described in section
Qualified empowerment zone wages are qualified
2032A(e)(5)(A) or (B).
wages paid or incurred by an employer for services
Early termination of employee. Generally, an
performed by an employee while the employee is a
individual is not a qualified empowerment zone employee
qualified empowerment zone employee (defined earlier).
unless employed for at least 90 days. The 90-day
The maximum wages that may be taken into account for
requirement does not apply in the following situations.
each employee is limited to $15,000. The $15,000 amount
The employee is terminated because of misconduct as
for any employee is reduced by the amount of wages paid
determined under the applicable state unemployment
or incurred during the calendar year on behalf of that
compensation law.
employee that are used in figuring the work opportunity
credit (Form 5884).
-2-
Instructions for Form 8844 (2015)

ADVERTISEMENT

00 votes

Related Articles

Related forms

Related Categories

Parent category: Legal
Go
Page of 4