OMB No. 1545-1417

Form 8845 Indian Employment Credit

Department of the Treasury

Internal Revenue Service © Attach to your return.

Attachment

Sequence No. 93

Name(s) as shown on return Identifying number

Current Year Indian Employment Credit

1 Total of qualified wages and qualified employee health insurance costs paid or incurred during

the tax year 1

Calendar year 1993 qualified wages and qualified employee health insurance costs (see

instructions). If none, enter -0-

2

2

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

Schedule K-1 (Form 1120S), lines 12d, 12e, or 13

Schedule K-1 (Form 1065), lines 13c, 13d, or 14

Schedule K-1 (Form 1041), line 13

Written statement from cooperative

a Shareholder

b Partner

c Beneficiary

d Patron

Indian employment

credits from

flow-through entities

5

5

Total current year credit. Add lines 4 and 5. (S corporations, partnerships, estates, trusts, and

cooperatives, see instructions.)

6

6

Tax Liability Limit (See Who Must File Form 3800 to find out if you complete Part II or file Form 3800.)

7a Individuals. Enter amount from Form 1040, line 40

Corporations. Enter amount from Form 1120, Schedule J, line 3 (or Form 1120-A, Part I, 7

line 1)

b

c Other filers. Enter regular tax before credits from your return

8a Credit for child and dependent care expenses (Form 2441, line 10) 8a

8b

Credit for the elderly or the disabled (Schedule R (Form 1040),

line 20)

b

c Mortgage interest credit (Form 8396, line 11) 8c

d Foreign tax credit (Form 1116, line 32, or Form 1118, Sch. B, line 12) 8d

e Possessions tax credit (Form 5735) 8e

g 8g

8h

Credit for fuel from a nonconventional source

h

i Add lines 8a through 8h

9 Net regular tax. Subtract line 8i from line 7 9

10 Tentative minimum tax (see instructions):

a Individuals. Enter amount from Form 6251, line 26

b Corporations. Enter amount from Form 4626, line 13

c Estates and trusts. Enter amount from Form 1041, Schedule I, line 37

11 Net income tax:

a Individuals. Add line 9 above and line 28 of Form 6251

b Corporations. Add line 9 above and line 15 of Form 4626

c Estates and trusts. Add line 9 above and line 41 of Form 1041, Schedule I

12 If line 9 is more than $25,000, enter 25% (.25) of the excess (see instructions) 12

13 Subtract line 10 or line 12, whichever is greater, from line 11. If zero or less, enter -0- 13

Indian employment credit allowed for the current year. Enter the smaller of line 6 or line 13.

This is your General Business Credit for 1995. Enter here and on Form 1040, line 44; Form

1120, Schedule J, line 4d; Form 1120-A, Part I, line 2a; Form 1041, Schedule G, line 2c; or the

appropriate line of other income tax returns

14

14

Form 8845 (1995)

Part I

Part II

%

%

%

%

Cat. No. 16146D

8i

Qualified electric vehicle credit (Form 8834, line 19)

3

4

3 Incremental increase. Subtract line 2 from line 1

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

10

11

For Paperwork Reduction Act Notice, see page 3.

Orphan drug credit (Form 6765) 8f f
Form 8845 (1995) Page 3

Qualified employee health insurance costs means any

amount paid or incurred by an employer for health insurance

to the extent such amount is attributable to coverage

provided to any employee while such employee is a qualified

employee. No amount paid or incurred for health insurance

under a salary reduction arrangement may be included.

Qualified employee means, for any tax period, any

employee of an employer if the employee meets all the

following tests:

1. The employee is an enrolled member of an Indian tribe

or the spouse of an enrolled member of an Indian tribe. The

tribe keeps the enrollment list.

2. Substantially all the services performed during that

period by the employee for the employer are performed

within an Indian reservation (defined in next column).

3. The employee’s principal residence while performing

such services is on or near the reservation where the

services are performed.

However, the employee shall be treated as a qualified

employee for any tax year of the employer only if more than

50% of the wages paid or incurred by the employer to the

employee during the year are for services performed in the

employer’s trade or business. Each member of a controlled

group must meet this requirement independently.

The following are not qualified employees:

● Any individual who bears any of the relationships

described in sections 152(a)(1) through 152(a)(8) to, or is a

dependent described in section 152(a)(9) of, the employer.

● Any individual who performs services involving the conduct

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

Indian Gaming Regulatory Act and any individual performing

any services in a building housing such gaming activity.

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

any individual who owns directly or indirectly more than 50%

of the capital and profits interest, including constructive

ownership, in the entity.

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

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

dependent, as described in section 152(a)(9), of that

individual), or any individual who is a relative, as described in

sections 152(a)(1) through 152(a)(8), of the grantor,

beneficiary, or fiduciary of the estate or trust.

● Any person who owns (or is considered to own under

section 318) more than 5% of the outstanding or voting

stock of the employer or, if not a corporate employer, more

than 5% of the capital or profits interest in the employer.

Indian tribe means any Indian tribe, band, nation, pueblo,

or other organized group or community, including any Alaska

Native village or regional or village corporation, as defined in,

or established under, the Alaska Native Claims Settlement

Act, that is recognized as eligible for the special programs

and services provided by the United States to Indians

because of their status as Indians. See the Federal Register

dated February 16, 1995 (60 FR 9250), for the most recent

listing of federally recognized Indian tribes.

Indian reservation means a reservation as defined in

section 3(d) of the Indian Financing Act of 1974 or section

4(10) of the Indian Child Welfare Act of 1978.

Early Termination of Employee

Generally, if the employer terminates a qualified employee

less than 1 year after the date of initial employment:

● The employee voluntarily quits.

● The employee is terminated because of misconduct.

● The employee becomes disabled. However, if the disability

ends before the end of the first year of employment, the

employer must offer reemployment to the former employee.

● If the employer is a corporation, any individual who bears

any of the relationships described in section 152(a)(1)

through 152(a)(8) to, or is a dependent described in section

152(a)(9) of, an individual who owns (or is considered to own

under section 267(c)) more than 50% in value of the

outstanding stock of the corporation.

1. No wages or qualified employee health insurance costs

may be taken into account for the tax year the employment

is terminated, and

2. Any credits allowed for prior tax years by reason of

wages paid or incurred by the employer to that employee

must be recaptured. Report the amount on the “Recapture

taxes” line of the income tax return and write “45A” to the

left of the entry. Also, any carryback or carryover of the

credit is adjusted.

These rules do not apply if:

We ask for the information on this form to carry out the

Internal Revenue laws of the United States. You are required

to give us the information. We need it to ensure that you are

complying with these laws and to allow us to figure and

collect the right amount of tax.

Recordkeeping 5 hr., 59 min.

Learning about the law

or the form 1 hr., 35 min.

Preparing and sending

the form to the IRS 1 hr., 46 min.

The time needed to complete and file this form will vary

depending on individual circumstances. The estimated

average time is:

Paperwork Reduction Act Notice

General Instructions

Section references are to the Internal Revenue Code unless

otherwise noted.

In most cases, the credit is 20% of the excess of an

employer’s current year qualified wages and qualified

employee health insurance costs over the sum of the

corresponding amounts paid or incurred during calendar year

1993 by the employer (or predecessor). For purposes of the

credit, the total amount of qualified wages and costs may

not exceed $20,000 for each employee.

If you have comments concerning the accuracy of these

time estimates or suggestions for making this form simpler,

we would be happy to hear from you. You can write to the

IRS at the address listed in the instructions for the tax return

with which this form is filed.

Purpose of Form

Employers of American Indians who are qualified employees

(see Definitions) use Form 8845 to claim the Indian

employment credit under section 45A.

Definitions

Qualified wages means any wages paid or incurred by an

employer for services performed by an employee while such

employee is a qualified employee (see below). It does not

include wages attributable to services rendered during the

1-year period beginning with the day the employee starts

work for the employer if any portion of such wages is used in

figuring the targeted jobs credit on Form 5884. Wages has

the same meaning as given in section 51.