Instructions For Form 8941 - Credit For Small Employer Health Insurance Premiums - 2016 Page 6


discussed above. A sole proprietor must include both
Excluded employees. The following individuals aren’t
business and nonbusiness employees to determine FTEs,
considered employees when you figure this credit. Hours
average annual wages, and premiums paid.
and wages of these employees and premiums paid for
them aren’t counted when you figure your credit.
Ministers. A minister performing services in the exercise
The owner of a sole proprietorship.
of his or her ministry is treated as self-employed for social
A partner in a partnership.
security and Medicare purposes. However, for credit
A shareholder who owns (after applying the section 318
purposes, whether a minister is an employee or
constructive ownership rules) more than 2% of an S
self-employed is determined under the common law test
for determining worker status. Self-employed ministers
A shareholder who owns (after applying the section 318
aren’t considered employees.
constructive ownership rules) more than 5% of the
Column (b), Employee Hours of
outstanding stock or stock possessing more than 5% of
the total combined voting power of all stock of a
corporation that is not an S corporation.
Enter the total hours of service for the tax year for each
A person who owns more than 5% of the capital or
employee listed in column (a). Don’t enter more than
profits interest in any other business that isn’t a
2,080 hours for any employee. But enter -0- for seasonal
employees who worked 120 or fewer days during the tax
Family members or a member of the household who is
not a family member but qualifies as a dependent on the
individual income tax return of a person listed above.
Employee hours of service. An employee’s hours of
Family members include a child (or descendant of a
service for a year include the following.
child), a sibling or step-sibling, a parent (or ancestor of a
Each hour for which the employee is paid, or entitled to
parent), a step-parent, a niece or nephew, an aunt or
payment, for the performance of duties for the employer
uncle, or a son-in-law, daughter-in-law, father-in-law,
during the employer’s tax year.
mother-in-law, brother-in-law, or sister-in-law. A spouse of
Each hour for which an employee is paid, or entitled to
any owner or family member listed above is also
payment, by the employer on account of a period of time
considered a family member for this purpose.
during the employer's tax year during which no duties are
performed due to vacation, holiday, illness, incapacity
Former employees. Premiums paid on behalf of a
(including disability), layoff, jury duty, military duty, or
former employee with no hours of service may be treated
leave of absence (except that no more than 160 hours of
as paid on behalf of an employee for purposes of figuring
service are required to be counted for an employee on
the credit provided that, if so treated, the former employee
account of any single continuous period during which the
is also treated as an employee for purposes of the uniform
employee performs no duties).
percentage requirement.
To figure the total number of hours of service you must
Leased employees. Don’t use premiums paid by the
take into account for an employee for the year, you can
leasing organization to figure your credit. Also, a leased
use any of the following methods.
employee who isn’t a common law employee is
Actual hours worked method. Determine actual
considered an employee for credit purposes if he or she
hours of service from records of hours worked and hours
does all the following.
for which payment is made or due (payment is made or
Provides services to you under an agreement between
due for vacation, holiday, illness, incapacity, etc., as
you and a leasing organization.
described above).
Has performed services for you (or for you and a
Days-worked equivalency method. Use a
related person) substantially full time for at least 1 year.
days-worked equivalency whereby the employee is
Performs services under your primary direction or
credited with 8 hours of service for each day for which the
employee would be required to be credited with at least
But don’t use hours, wages, or premiums paid with
one hour of service under the rules described above.
respect to the initial year of service on which leased
Weeks-worked equivalency method. Use a
employee status is based.
weeks-worked equivalency whereby the employee is
Seasonal employees. Employees who perform labor or
credited with 40 hours of service for each week for which
services on a seasonal basis and perform labor or
the employee would be required to be credited with at
services for you 120 or fewer days during the tax year
least one hour of service under the rules described above.
aren’t considered employees in determining FTEs and
Column (c), Employee Wages Paid
average annual wages. But premiums paid on their behalf
are counted in determining the amount of the credit.
Complete Worksheet 2 before you complete
Seasonal workers include retail workers employed
column (c) of Worksheet 1. Do not complete
exclusively during holiday seasons. Seasonal workers
column (c) if Worksheet 2, line 3, is 25 or more.
also include workers employed exclusively during the
Enter the total wages paid for the tax year for each
employee listed in column (a). But enter -0- for seasonal
Household and other nonbusiness employees.
employees who worked 120 or fewer days during the tax
Household employees and other employees who aren’t
performing services in your trade or business are
considered employees if they otherwise qualify as
Instructions for Form 8941 (2017)


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