Instructions for Form 8974
Department of the Treasury
Internal Revenue Service
(Rev. December 2017)
Qualified Small Business Payroll Tax Credit for Increasing Research Activities
Section references are to the Internal Revenue Code
claim the qualified small business payroll tax credit for
unless otherwise noted.
increasing research activities against your payroll taxes.
The election is made on Form 6765, Credit for Increasing
Future Developments
Research Activities. If you haven’t filed the income tax
return making the election to claim the payroll tax credit on
For the latest information about developments related to
Form 6765, you can’t file Form 8974 and can’t claim the
Form 8974 and its instructions, such as legislation
qualified small business payroll tax credit for increasing
enacted after they were published, go to
IRS.gov/
research activities against your payroll taxes on Form 941,
Form8974.
943, or 944.
What’s New
You can’t claim the qualified small business
Credit added to Forms 943, 943-PR, 944, and
payroll tax credit for increasing research activities
!
944(SP). The qualified small business payroll tax credit
on a Form 941, 943, or 944 unless you make the
CAUTION
for increasing research activities can be claimed on the
election on Form 6765 and then file a Form 8974 attached
2017 Form 943, Employer’s Annual Federal Tax Return
to Form 941, 943, or 944.
for Agricultural Employees; 2017 Form 943-PR, Planilla
para la Declaración Anual de la Contribución Federal del
Aggregate Form 941
Patrono de Empleados Agrícolas; 2017 Form 944,
If you’re a Section 3504 agent or a certified professional
Employer’s ANNUAL Federal Tax Return; and 2017 Form
employer organization (CPEO), you must complete
944(SP), Declaración Federal ANUAL de Impuestos del
Schedule R (Form 941), Allocation Schedule for
Patrono o Empleador.
Aggregate Form 941 Filers, when filing an aggregate
Form 8974, Part 1, redesigned. Part 1 of Form 8974
Form 941. Additionally, you must attach a Form 8974 for
has been redesigned to allow reporting of income tax
each client that is taking the qualified small business
return information for up to 5 years. Part 1 also tracks the
payroll tax credit for increasing research activities. See
amount of credit that has been used or is remaining for
the instructions for
Line 8
and
Line
9, later, for more
use as a carryforward credit.
information.
Notice 2017-23. Notice 2017-23, 2017-16 I.R.B. 1100,
Aggregate Form 943
available at IRS.gov/irb/2017-16_IRB/ar07.html, provides
If you’re a Section 3504 agent or a CPEO, you must
interim guidance on the qualified small business payroll
complete Schedule R (Form 943), Allocation Schedule for
tax credit for increasing research activities.
Aggregate Form 943 Filers, when filing an aggregate
Form 943. Additionally, you must attach a Form 8974 for
General Instructions
each client that is taking the qualified small business
payroll tax credit for increasing research activities. See
Purpose of Form 8974
the instructions for
Line
8, later, for more information.
Use Form 8974 to determine the amount of the qualified
Correcting Form 8974
small business payroll tax credit for increasing research
activities that you can claim on Form 941, Employer’s
Form 8974 filed with Form 941. If you discover an error
QUARTERLY Federal Tax Return; Form 941-SS,
on a previously filed Form 8974, make the correction by
Employer’s QUARTERLY Federal Tax Return (American
filing Form 941-X, Adjusted Employer’s QUARTERLY
Samoa, Guam, the Commonwealth of the Northern
Federal Tax Return or Claim for Refund, with a corrected
Mariana Islands, and the U.S. Virgin Islands); Form
Form 8974. For more information, see the Instructions for
941-PR, Planilla para la Declaración Federal
Form 941-X.
TRIMESTRAL del Patrono; Form 943; Form 943-PR;
Form 8974 filed with Form 943 or 944. If you discover
Form 944; or Form 944(SP). This payroll tax credit is a
an error on a previously filed Form 8974, make the
credit against the employer portion of social security tax
correction by filing Form 943-X, Adjusted Employer’s
on the wages of your employees.
Annual Federal Tax Return for Agricultural Employees or
All references to Form 941 in these instructions also
Claim for Refund, or Form 944-X, Adjusted Employer’s
apply to Forms 941-SS and 941-PR. All references to
ANNUAL Federal Tax Return or Claim for Refund, as
Form 943 in these instructions also apply to Form 943-PR.
applicable, with a corrected Form 8974. For more
All references to Form 944 in these instructions also apply
information, see the Instructions for Form 943-X or the
to Form 944(SP).
Instructions for Form 944-X.
Who Must File Form 8974?
You must file Form 8974 and attach it to Form 941, 943, or
944 if you made an election on your income tax return to
Dec 04, 2017
Cat. No. 68750R