8845

OMB No. 1545-1417

Indian Employment Credit
Form

Department of the Treasury

2002
Attachment
Internal Revenue Service 䊳 Attach to your tax return. Sequence No. 113
Name(s) as shown on return Identifying number

Part I Current Year Credit

1 Total of qualified wages and qualified employee health insurance costs paid or incurred during
the tax year 1
2 Calendar year 1993 qualified wages and qualified employee health insurance costs (see
instructions). If none, enter -0- 2

3 Incremental increase. Subtract line 2 from line 1 3

4 Multiply line 3 by 20% (.20) (see instructions) 4

If you are a— Then enter the total of the current year credit(s) from—
5 Indian employment

其
a Shareholder Schedule K-1 (Form 1120S), lines 12d, 12e, or 13
credits from b Partner Schedule K-1 (Form 1065), lines 12c, 12d, or 13
pass-through entities: c Beneficiary Schedule K-1 (Form 1041), line 14 5
d Patron Written statement from cooperative

6 Current year credit. Add lines 4 and 5. (S corporations, partnerships, estates, trusts, and
cooperatives, see instructions.) 6
Part II Allowable Credit (See Who must file Form 3800 to find out if you complete Part II or file Form 3800.)

其
7 Regular tax before credits:
● Individuals. Enter the amount from Form 1040, line 42
● Corporations. Enter the amount from Form 1120, Schedule J, line 3; Form 1120-A,
Part I, line 1; or the applicable line of your return 7
● Estates and trusts. Enter the sum of the amounts from Form 1041, Schedule G, lines 1a
and 1b, or the amount from the applicable line of your return
8 Alternative minimum tax:

其
● Individuals. Enter the amount from Form 6251, line 35
● Corporations. Enter the amount from Form 4626, line 15 8
● Estates and trusts. Enter the amount from Form 1041, Schedule I, line 56
9 Add lines 7 and 8 9
10a Foreign tax credit 10a
b Credit for child and dependent care expenses (Form 2441, line 11) 10b
c Credit for the elderly or the disabled (Schedule R (Form 1040), line 24) 10c
d Education credits (Form 8863, line 18) 10d
e Credit for qualified retirement savings contributions (Form 8880, line 14) 10e
f Child tax credit (Form 1040, line 50) 10f
g Mortgage interest credit (Form 8396, line 11) 10g
h Adoption credit (Form 8839, line 18) 10h
i District of Columbia first-time homebuyer credit (Form 8859, line 11) 10i
j Possessions tax credit (Form 5735, line 17 or 27) 10j
k Credit for fuel from a nonconventional source 10k
l Qualified electric vehicle credit (Form 8834, line 20) 10l
m Add lines 10a through 10l 10m
11 Net income tax. Subtract line 10m from line 9. If zero, skip lines 12 through 15 and enter -0- on line 16 11
12 Net regular tax. Subtract line 10m from line 7. If zero or less, enter -0- 12
13 Enter 25% (.25) of the excess, if any, of line 12 over $25,000 (see instructions) 13

其
14 Tentative minimum tax (see instructions):
● Individuals. Enter the amount from Form 6251, line 33
● Corporations. Enter the amount from Form 4626, line 13
14
● Estates and trusts. Enter the amount from Form 1041,
Schedule I, line 54
15 Enter the greater of line 13 or line 14 15
16 Subtract line 15 from line 11. If zero or less, enter -0- 16
17 Credit allowed for the current year. Enter the smaller of line 6 or line 16 here and on Form
1040, line 53; Form 1120, Schedule J, line 6d; Form 1120-A, Part I, line 2a; Form 1041, Schedule
G, line 2c; or the applicable line of your return. If line 16 is smaller than line 6, see instructions 17
For Paperwork Reduction Act Notice, see page 3. Cat. No. 16146D Form 8845 (2002)
Form 8845 (2002) Page 2

General Instructions ● Any person who owns (or is considered to own under
section 318) more than 5% of the outstanding or voting
Section references are to the Inter nal Revenue Code unless stock of the employer or, if not a corporate employer, more
otherwise noted. than 5% of the capital or profits interest in the employer.
● Any individual who performs services involving the conduct
Purpose of Form of Class I, II, or III gaming as defined in section 4 of the
Employers of American Indians who are qualified employees Indian Gaming Regulatory Act and any individual performing
use Form 8845 to claim the Indian employment credit. any services in a building housing such gaming activity.
Indian tribe means any Indian tribe, band, nation, pueblo,
Definitions or other organized group or community, including any Alaska
Native village or regional or village corporation, as defined in,
Qualified wages means any wages paid or incurred by an or established under, the Alaska Native Claims Settlement
employer for services performed by an employee while such Act, that is recognized as eligible for the special programs
employee is a qualified employee (see below). It does not and services provided by the United States to Indians
include wages attributable to services rendered during the because of their status as Indians. See the Federal Register
1-year period beginning with the day the employee starts dated July 12, 2002 (67 FR 46328), for the most recent
work for the employer if any portion of such wages is used in listing of federally recognized Indian tribes.
figuring the work opportunity credit on Form 5884 or the
Indian reservation means a reservation as defined in
New York Liberty Zone business employee credit on Form
section 3(d) of the Indian Financing Act of 1974 or section
8884. Wages has the same meaning given in section 51.
4(10) of the Indian Child Welfare Act of 1978.
Qualified employee health insurance costs means any
amount paid or incurred by an employer for health insurance
coverage for an employee while the employee is a qualified
Early Termination of Employee
employee. Do not include amounts paid or incurred for Generally, if the employer terminates a qualified employee
health insurance under a salary reduction arrangement. less than 1 year after the date of initial employment, the
Qualified employee means, for any tax period, any following rules apply.
employee who meets all three of the following tests. ● No wages or qualified employee health insurance costs
1. The employee is an enrolled member, or the spouse of may be taken into account for the tax year the employment
an enrolled member, of an Indian tribe. Each tribe determines is terminated.
who qualifies for enrollment and what documentation, if any, ● Any credits allowed for prior tax years by reason of wages
is issued as proof of enrollment status. Examples of paid or incurred to that employee must be recaptured.
appropriate documentation will vary from one tribe to another Include the recapture amount on the line for recapture taxes
and may include a tribal membership card, Certified Degree on your income tax return. Also, any carryback or carryover
of Indian Blood (CDIB) card, or letter from the tribe or tribal of the credit must be adjusted.
enrollment office. Employers should retain a copy of the These rules do not apply if:
proof of enrollment status provided by the employee. ● The employee voluntarily quits;
2. Substantially all the services performed by the employee ● The employee is terminated because of misconduct; or
for the employer are performed within an Indian reservation
(defined below). ● The employee becomes disabled. However, if the disability
ends during the first year of employment, the employer must
3. The employee’s principal residence while performing offer reemployment to that employee.
such services is on or near the reservation where the
services are performed. An employee is not treated as terminated if the corporate
employer is acquired by another corporation covered under
However, the employee shall be treated as a qualified the rules in section 381(a) and the employee continues to be
employee for any tax year only if more than 50% of the employed by the acquiring corporation. Nor is a mere change
wages paid or incurred by the employer to the employee in the form of conducting the trade or business treated as a
during the tax year are for services performed in the termination if the employee continues to be employed in
employer’s trade or business. Each member of a controlled such trade or business and the taxpayer retains a substantial
group must meet this requirement independently. Also, see interest in such trade or business.
the instructions for lines 1 and 2.
The following are not qualified employees.
● Any individual who bears any of the relationships
Specific Instructions
described in sections 152(a)(1) through 152(a)(8) to, or is a
dependent described in section 152(a)(9) of, the employer. Part I—Current Year Credit
● If the employer is a corporation, any individual who bears Figure the credit for your trade or business on lines 1 through
any of the relationships described in sections 152(a)(1) 4. Skip lines 1 through 4 if you are only claiming a credit that
through 152(a)(8) to, or is a dependent described in section was allocated to you from a pass-through entity. The
152(a)(9) of, an individual who owns (or is considered to own following rules apply for lines 1 and 2.
under section 267(c)) more than 50% in value of the ● The total amount of qualified wages and qualified
outstanding stock of the corporation. employee health insurance costs for each qualified employee
● If the employer is an estate or trust, any individual who is a for any tax year is limited to $20,000.
grantor, beneficiary, or fiduciary of the estate or trust (or a ● Members of a controlled group of corporations and
dependent, as described in section 152(a)(9), of that businesses under common control are treated as a single
individual), or any individual who is a relative, as described in employer in determining the credit.
sections 152(a)(1) through 152(a)(8), of the grantor, ● For a short tax year, multiply the wages limit by the
beneficiary, or fiduciary of the estate or trust. number of days in the short tax year and divide the result by
● If the employer is other than a corporation, estate, or trust, 365.
any individual who owns directly or indirectly more than 50%
of the capital and profits interest, including constructive
ownership, in the entity.
Form 8845 (2002) Page 3

Line 1 Line 13
Enter the total qualified wages and qualified employee health See section 38(c)(4) for special rules that apply to married
insurance costs paid or incurred for qualified employees couples filing separate returns, controlled corporate groups,
during the tax years. An employee is not a qualified regulated investment companies, real estate investment
employee if the total amount of wages paid or incurred by trusts, and estates and trusts.
the employer to the employee during the tax year (whether or
not for services within an Indian reservation) exceeds Line 14
$35,000. Although you may not owe alternative minimum tax (AMT),
you generally must still compute the tentative minimum tax
Line 2 (TMT) to figure your credit. For a small corporation exempt
Enter the total qualified wages and qualified employee health from the AMT under section 55(e), enter zero. Otherwise,
insurance costs paid or incurred by the employer (or complete and attach the applicable AMT form or schedule
predecessor) for qualified employees during calendar year and enter the TMT on line 14.
1993 (as if section 45A had been in effect during 1993). If
none, enter zero. For this purpose, an employee is not a Line 17
qualified employee if the total amount of wages paid or If you cannot use all of the credit because of the tax liability
incurred by the employer to the employee during calendar limit (line 16 is smaller than line 6), carry the unused credit
year 1993 (whether or not for services within an Indian back 1 year and then forward up to 20 years. See the
reservation) exceeds $30,000. instructions for Form 3800 for details.
Line 4
Generally, you must reduce the deductions on your return for Paperwork Reduction Act Notice. We ask for the
salaries and wages and health insurance costs by the credit information on this form to carry out the Internal Revenue
on line 4, even if you cannot take the full credit this year laws of the United States. You are required to give us the
because of the tax liability limit. If you capitalized any costs information. We need it to ensure that you are complying
on which you figured the credit, reduce the amount with these laws and to allow us to figure and collect the right
capitalized by the credit attributable to these costs. amount of tax.
You are not required to provide the information requested
Line 6 on a form that is subject to the Paperwork Reduction Act
If you have a credit from a passive activity, stop here and go unless the form displays a valid OMB control number. Books
to Form 3800. or records relating to a form or its instructions must be
S corporations and partnerships. Allocate the line 6 credit retained as long as their contents may become material in
among the shareholders or partners. Show the credit for the administration of any Internal Revenue law. Generally, tax
each shareholder or partner on Schedule K-1. Electing large returns and return information are confidential, as required by
partnerships include this credit in “general credits.” section 6103.
The time needed to complete and file this form will vary
Estates and trusts. Allocate the line 6 credit between the depending on individual circumstances. The estimated
estate or trust and the beneficiaries in proportion to the average time is:
income allocable to each. On the dotted line to the left of the Recordkeeping 7 hr., 53 min.
amount on line 6, the estate or trust should enter its part of Learning about the law
the total Indian employment credit. Label it “1041 Portion” or the form 1 hr., 40 min.
and use this amount in Part II (or on Form 3800, if required)
to figure the credit to claim on Form 1041. Preparing and sending
the form to the IRS 1 hr., 53 min.
Cooperatives. Most tax-exempt organizations cannot take
the Indian employment credit, but a cooperative described in If you have comments concerning the accuracy of these
section 1381(a) takes the Indian employment credit to the time estimates or suggestions for making this form simpler,
extent it has tax liability. Any excess is shared among its we would be happy to hear from you. See the instructions
patrons, but any credit recapture applies as if the for the tax return with which this form is filed.
cooperative had claimed the entire credit.

Part II—Allowable Credit

The credit allowed for the current year may be limited based
on your tax liability. Use Part II to figure the allowable credit
unless you must file Form 3800, General Business Credit.
Who must file Form 3800. You must file Form 3800 if you
have:
● An Indian employment credit from a passive activity,
● More than one credit included in the general business
credit (other than a credit from Form 8844 or 8884), or
● A carryback or carryforward of any of those credits.
See the instructions for Form 3800 to find out which
credits are included in the general business credits.