OMB No. 1545-2126

Form 8932

Department of the Treasury

Internal Revenue Service

Attachment

Sequence No. 161

Name(s) shown on return Identifying number

2 Multiply line 1 by 20% (.20) (see instructions for the adjustment you must make) 2

3

3 Credit for employer differential wage payments from partnerships, S corporations, cooperatives, 

estates, and trusts (see instructions) 

4

4 Add lines 2 and 3. Cooperatives, estates, and trusts, go to line 5; partnerships and S corporations, 

report this amount on Schedule K; all others, report this amount on Form 3800, line 1w 

Amount allocated to patrons of the cooperative or beneficiaries of the estate or trust

(see instructions) 

5

5

Cooperative, estates, and trusts. Subtract line 5 from line 4. Report this amount on Form 3800, 

line 1w 

6

Cat. No. 37747W Form 8932 (12-2008)

Credit for Employer Differential Wage Payments

© Attach to your tax return.

For Paperwork Reduction Act Notice, see page 2.

1 Eligible differential wage payments paid during the tax year (see instructions) 1

6

(December 2008)

General Instructions

Purpose of Form

Use Form 8932 to claim the credit for eligible differential

wage payments you made to qualified employees

during the tax year. Only differential wage payments

made to qualified employees during calendar year 2009

can be used to figure the credit. The credit is available

only to eligible small business employers. The credit is

20% of the first $20,000 of differential wage payments

paid to each qualified employee.

● Employed on average fewer than 50 employees on

business days during the tax year, and

● Under a written plan of the employer, provides

eligible differential wage payments to every qualified

employee of the employer.

Section references are to the Internal Revenue Code.

An eligible small business employer means any

taxpayer that:

The credit for employer differential wage payments is

part of the general business credit reported on Form

3800, General Business Credit.

For details, see section 45P.

Definitions

Qualified Employee

A qualified employee is an employee of an eligible small

business employer for the 91-day period immediately

preceding the period for which any differential wage

payment is made.

Differential Wage Payment

To be considered a differential wage payment, the

payment must be paid during calendar year 2009 and

meet both of the following requirements.

● The payment is made by an eligible small business

employer to a qualified employee for any period during

which the employee is performing service in the

uniformed services of the United States while on active

duty for a period of more than 30 days.

● The payment represents all or a portion of the wages

the employee would have received from the employer

if the employee were performing services for the

employer.

Eligible Small Business Employer

Uniformed Services

Uniformed services means the Armed Forces; the Army

National Guard and the Air National Guard when

engaged in active duty for training, inactive duty

training, or full-time National Guard duty; the

commissioned corps of the Public Health Service; and

any other category of persons designated by the

President in time of war or national emergency.

For purposes of this definition, all persons treated as a

single employer under subsection (b), (c), (m), or (o) of

section 414 are treated as a single employer.

Coordination With Other Credits

The amount of any research credit or orphan drug

credit otherwise allowable for compensation paid to

any employee is reduced by the credit for differential

wage payments figured for that employee.

Disallowance for Failure To Comply With

Employment or Reemployment Rights of

Members of the Reserve Components of

the Armed Forces of the United States

No credit will be allowed to a taxpayer for:

● Any tax year beginning after June 17, 2008, in which

the taxpayer is under a final order, judgment, or other

process issued or required by a district court of the

United States under section 4323 of title 38 of the

United States Code with respect to a violation of

chapter 43 of title 38; and

● The two succeeding tax years.

Taxpayers (other than partnerships, S corporations,

estates, and trusts) whose only source of this credit is

from those pass-through entities are not required to

complete or file this form. Instead, report this credit

directly on line 1w of the 2008 Form 3800.

Eligible Differential Wage Payments

Eligible differential wage payments are the total

differential wage payments paid to the employee for the

tax year, up to $20,000.
Form 8932 (12-2008) Page 2

Specific Instructions

Line 1

Enter the total of the first $20,000 in differential wage

payments made to each qualified employee during the

tax year.

Line 2

Generally, you must reduce the deductions on your

return for salaries and wages by the credit on line 2,

even if you cannot take the full credit this year because

of the tax liability limit. If you capitalized any costs on

which you figured the credit, reduce the amount

capitalized by the credit attributable to these costs.

Line 5

Cooperatives. A cooperative described in section

1381(a) must allocate to its patrons the credit in excess

of its tax liability limit. Therefore, to figure the unused

amount of the credit allocated to patrons, the

cooperative must first figure its tax liability.

Estates and trusts. Allocate the credit for employer

differential wage payments on line 4 between the estate

or trust and the beneficiaries in the same proportion as

income allocated and enter the beneficiaries share on

line 5.

Paperwork Reduction Act Notice. 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 1 hr., 54 min.

Learning about the

law or the form 30 min.

Preparing and sending the form

to the IRS 33 min.

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.

See the instructions for the tax return with which this

form is filed.

You are not required to provide the information

requested on a form that is subject to the Paperwork

Reduction Act unless the form displays a valid OMB

control number. Books or records relating to a form or

its instructions must be retained as long as their

contents may become material in the administration of

any Internal Revenue law. Generally, tax returns and

return information are confidential, as required by

section 6103.

The time needed to complete and file this form will

vary depending on individual circumstances. The

estimated burden for individual taxpayers filing this

form is approved under OMB control number

1545-0074 and is included in the estimates shown in

the instructions for their individual income tax return.

The estimated burden for all other taxpayers who file

this form is shown below.

Line 3

Enter the amount of credit that was allocated to you as

a partner, shareholder, patron of a cooperative, or

beneficiary.