Instructions for IRS Form 8844 - Empowerment Zone Employment Credit 2017

January 1, 2017 "Instructions For Irs Form 8844 - Empowerment Zone Employment Credit" contain the latest filing requirements for the IRS-issued Form 8844. Download your copy of the instructions by clicking the link below.

IRS Form 8844 is tax form released and collected by the Internal Revenue Service of the United States.

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2017
Department of the Treasury
Internal Revenue Service
Instructions for Form 8844
Empowerment Zone Employment Credit
Section references are to the Internal Revenue Code
Boston, MA
unless otherwise noted.
Baltimore, MD
Detroit, MI
Future Developments
Minneapolis, MN
St. Louis, MO/East St. Louis, IL
For the latest information about developments related to
Cumberland County, NJ
Form 8844 and its instructions, such as legislation
New York, NY
enacted after they were published, go to
IRS.gov/
Syracuse, NY
Form8844.
Yonkers, NY
What's New
Cincinnati, OH
The empowerment zone designation was retroactively
Cleveland, OH
Columbus, OH
extended for calendar year 2017 only. Don’t claim this
credit for qualified empowerment zone wages paid or
Oklahoma City, OK
Philadelphia, PA/Camden, NJ
incurred after 2017 on Form 8844 unless the credit is
extended.
Columbia/Sumter, SC
Knoxville, TN
General Instructions
El Paso, TX
San Antonio, TX
Purpose of Form
Norfolk/Portsmouth, VA
Huntington, WV/Ironton, OH
Use Form 8844 to claim the empowerment zone
employment credit. For tax years that include December
Note. The treatment of parts of Washington, DC as an
31, 2017, the credit is 20% of the employer's qualified
empowerment zone ended at the end of 2011.
wages (up to $15,000) paid or incurred during calendar
Rural areas. Parts of the following rural areas were
year 2017 on behalf of qualified empowerment zone
empowerment zones. You can find out if your business or
employees.
an employee’s residence is located within a rural
empowerment zone by going to HUD.gov.
Partnerships and S corporations must file this form to
Desert Communities, CA (part of Riverside County)
claim the credit. All others are generally not required to
Southwest Georgia United, GA (part of Crisp County
complete or file this form if their only source for this credit
is a partnership, S corporation, estate, trust, or
and all of Dooly County)
Southernmost Illinois Delta, IL (parts of Alexander and
cooperative. Instead, they can report this credit directly on
Form 3800, General Business Credit. The following
Johnson Counties and all of Pulaski County)
Kentucky Highlands, KY (part of Wayne County and all
exceptions apply.
You are an estate or trust and the source credit can be
of Clinton and Jackson Counties)
Aroostook County, ME (part of Aroostook County)
allocated to beneficiaries. For more details, see the
instructions for Form 1041, Schedule K-1, box 13, code K.
Mid-Delta, MS (parts of Bolivar, Holmes, Humphreys,
Leflore, Sunflower, and Washington Counties)
You are a cooperative and the source credit can or
must be allocated to patrons. For more details, see the
Griggs-Steele, ND (part of Griggs County and all of
Steele County)
instructions for Form 1120-C, Schedule J, line 5c.
Oglala Sioux Tribe, SD (parts of Jackson and Bennett
Empowerment Zones
Counties and all of Shannon County)
Middle Rio Grande FUTURO Communities, TX (parts of
Urban areas. Parts of the following urban areas were
Dimmit, Maverick, Uvalde, and Zavala Counties)
empowerment zones. You can find out if your business or
Rio Grande Valley, TX (parts of Cameron, Hidalgo,
an employee’s residence is located within an urban
Starr, and Willacy Counties)
empowerment zone by going to HUD.gov.
Pulaski County, AR
Qualified empowerment zone employee. A qualified
Tucson, AZ
empowerment zone employee is any employee (full-time
Fresno, CA
or part-time) of the employer who:
Los Angeles, CA (city and county)
Performs substantially all of the services for that
Santa Ana, CA
employer within an empowerment zone in the employer’s
New Haven, CT
trade or business, and
Jacksonville, FL
Has his or her principal residence within that
Miami/Dade County, FL
empowerment zone while performing those services.
Chicago, IL
Gary/Hammond/East Chicago, IN
Mar 01, 2018
Cat. No. 66393K
2017
Department of the Treasury
Internal Revenue Service
Instructions for Form 8844
Empowerment Zone Employment Credit
Section references are to the Internal Revenue Code
Boston, MA
unless otherwise noted.
Baltimore, MD
Detroit, MI
Future Developments
Minneapolis, MN
St. Louis, MO/East St. Louis, IL
For the latest information about developments related to
Cumberland County, NJ
Form 8844 and its instructions, such as legislation
New York, NY
enacted after they were published, go to
IRS.gov/
Syracuse, NY
Form8844.
Yonkers, NY
What's New
Cincinnati, OH
The empowerment zone designation was retroactively
Cleveland, OH
Columbus, OH
extended for calendar year 2017 only. Don’t claim this
credit for qualified empowerment zone wages paid or
Oklahoma City, OK
Philadelphia, PA/Camden, NJ
incurred after 2017 on Form 8844 unless the credit is
extended.
Columbia/Sumter, SC
Knoxville, TN
General Instructions
El Paso, TX
San Antonio, TX
Purpose of Form
Norfolk/Portsmouth, VA
Huntington, WV/Ironton, OH
Use Form 8844 to claim the empowerment zone
employment credit. For tax years that include December
Note. The treatment of parts of Washington, DC as an
31, 2017, the credit is 20% of the employer's qualified
empowerment zone ended at the end of 2011.
wages (up to $15,000) paid or incurred during calendar
Rural areas. Parts of the following rural areas were
year 2017 on behalf of qualified empowerment zone
empowerment zones. You can find out if your business or
employees.
an employee’s residence is located within a rural
empowerment zone by going to HUD.gov.
Partnerships and S corporations must file this form to
Desert Communities, CA (part of Riverside County)
claim the credit. All others are generally not required to
Southwest Georgia United, GA (part of Crisp County
complete or file this form if their only source for this credit
is a partnership, S corporation, estate, trust, or
and all of Dooly County)
Southernmost Illinois Delta, IL (parts of Alexander and
cooperative. Instead, they can report this credit directly on
Form 3800, General Business Credit. The following
Johnson Counties and all of Pulaski County)
Kentucky Highlands, KY (part of Wayne County and all
exceptions apply.
You are an estate or trust and the source credit can be
of Clinton and Jackson Counties)
Aroostook County, ME (part of Aroostook County)
allocated to beneficiaries. For more details, see the
instructions for Form 1041, Schedule K-1, box 13, code K.
Mid-Delta, MS (parts of Bolivar, Holmes, Humphreys,
Leflore, Sunflower, and Washington Counties)
You are a cooperative and the source credit can or
must be allocated to patrons. For more details, see the
Griggs-Steele, ND (part of Griggs County and all of
Steele County)
instructions for Form 1120-C, Schedule J, line 5c.
Oglala Sioux Tribe, SD (parts of Jackson and Bennett
Empowerment Zones
Counties and all of Shannon County)
Middle Rio Grande FUTURO Communities, TX (parts of
Urban areas. Parts of the following urban areas were
Dimmit, Maverick, Uvalde, and Zavala Counties)
empowerment zones. You can find out if your business or
Rio Grande Valley, TX (parts of Cameron, Hidalgo,
an employee’s residence is located within an urban
Starr, and Willacy Counties)
empowerment zone by going to HUD.gov.
Pulaski County, AR
Qualified empowerment zone employee. A qualified
Tucson, AZ
empowerment zone employee is any employee (full-time
Fresno, CA
or part-time) of the employer who:
Los Angeles, CA (city and county)
Performs substantially all of the services for that
Santa Ana, CA
employer within an empowerment zone in the employer’s
New Haven, CT
trade or business, and
Jacksonville, FL
Has his or her principal residence within that
Miami/Dade County, FL
empowerment zone while performing those services.
Chicago, IL
Gary/Hammond/East Chicago, IN
Mar 01, 2018
Cat. No. 66393K
See Qualified Employees below for a list of persons
An employee is not treated as terminated if the
who are not qualified employees.
corporate employer is acquired by another corporation
under section 381(a) and the employee continues to be
Qualified Employees
employed by the acquiring corporation. Nor is a mere
Any person may be a qualified employee except the
change in the form of conducting the trade or business
following.
treated as a termination if the employee continues to be
Any relative of the employer described in sections
employed in such trade or business and the taxpayer
152(d)(2)(A) through 152(d)(2)(G).
retains a substantial interest therein.
A dependent of the employer described in section
Wages
152(d)(2)(H).
If the employer is a corporation, any individual who
Wages are defined in section 51(c) and generally are
bears any of the relationships described in sections
wages (excluding tips) subject to the Federal
152(d)(2)(A) through 152(d)(2)(G), or is a dependent, as
Unemployment Tax Act (FUTA), without regard to the
described in section 152(d)(2)(H), of an individual who
FUTA dollar limitation. The following are also treated as
owns (or is considered to own under section 267(c)) more
wages.
than 50% in value of the outstanding stock of the
Amounts paid or incurred by the employer as
corporation.
educational assistance payments excludable from the
If the employer is an entity other than a corporation, any
employee’s gross income under section 127. However,
individual who owns directly or indirectly more than 50%
this does not apply if the employee has a relationship to
of the capital and profits interest, including constructive
the employer described in section 267(b) or 707(b)(1)
ownership, in the entity.
(substituting “10%” for “50%” in those sections) or the
If the employer is an estate or trust, any individual who
employer and employee are engaged in trades or
is a grantor, beneficiary, or fiduciary of the estate or trust
businesses under common control (within the meaning of
(or a dependent, as described in section 152(d)(2)(H), of
sections 52(a) and (b)).
such an individual), or any individual who is a relative, as
Amounts paid or incurred by the employer on behalf of
described in sections 152(d)(2)(A) through 152(d)(2)(G),
an employee under age 19 for a youth training program
of the grantor, beneficiary, or fiduciary of the estate or
operated by that employer in conjunction with local
trust.
education officials.
Any person who owns (or is considered to own under
Specific Instructions
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
Complete lines 1 and 2 to figure the current year credit for
employer.
your trade or business. Skip lines 1 and 2 if you are only
Any individual employed by the employer for less than
claiming a credit that was allocated to you from a
90 days. For exceptions, see Early termination of
pass-through entity.
employee, later.
Line 1—Qualified Empowerment Zone
Any individual employed by the employer at any private
Wages
or commercial golf course, country club, massage parlor,
hot tub facility, suntan facility, racetrack or other facility
Enter the total qualified empowerment zone wages paid or
used for gambling, or any store the principal business of
incurred during the calendar year 2017. The credit must
which is the sale of alcoholic beverages for consumption
be figured using only the wages that you paid or incurred
off premises.
in the calendar year that ended with or within your tax
Any individual employed by the employer in a trade or
year. For example, if your tax year began on April 1, 2016,
business of which the principal activity is farming (see
and ended on March 31, 2017, you must figure wages
Note below), but only if at the close of the tax year the
based on the calendar year that began on January 1,
sum of the following amounts exceeds $500,000.
2017, and ended on December 31, 2017. Wages paid
1. The larger of the unadjusted bases or fair market
after the end of the calendar year may be used only to
value of the farm assets owned by the employer.
figure the credit claimed on the following year’s tax return.
2. The value of the farm assets leased by the
Qualified empowerment zone wages are qualified
employer.
wages paid or incurred by an employer for services
Note. Certain farming activities are described in section
performed by an employee while the employee is a
2032A(e)(5)(A) or (B).
qualified empowerment zone employee (defined earlier).
The maximum wages that may be taken into account for
Early termination of employee. Generally, an
each employee is limited to $15,000. The $15,000 amount
individual is not a qualified empowerment zone employee
for any employee is reduced by the amount of wages paid
unless employed for at least 90 days. The 90-day
or incurred during the calendar year on behalf of that
requirement does not apply in the following situations.
employee that are used in figuring the work opportunity
The employee is terminated because of misconduct as
credit (Form 5884).
determined under the applicable state unemployment
compensation law.
Line 2
The employee becomes disabled before the 90th day.
In general, you must reduce your deduction for salaries
However, if the disability ends before the 90th day, the
and wages and certain educational and training costs by
employer must offer to reemploy the former employee.
the line 2 credit amount. You must make this reduction
-2-
Instructions for Form 8844 (2017)
Line 5
even if you cannot take the full credit this year because of
the tax liability limit. If you capitalized any costs on which
Cooperatives. A cooperative described in section
you figured the credit, reduce the amount capitalized by
1381(a) must allocate to its patrons the credit in excess of
the amount of the credit attributable to these costs.
its tax liability limit. Therefore, to figure the unused amount
Members of a controlled group of corporations and
of the credit allocated to patrons, the cooperative must
businesses under common control are treated as a single
first figure its tax liability. While any excess is allocated to
employer in determining the credit. The members share
patrons, any credit recapture applies as if the cooperative
the credit in the same proportion that they paid or incurred
had claimed the entire credit.
qualifying wages.
If the cooperative is subject to the passive activity rules,
Line 3
include on line 3 any empowerment zone and renewal
community employment credits from passive activities
Enter total empowerment zone employment credits from:
disallowed for prior years and carried forward to this year.
Schedule K-1 (Form 1065), Partner’s Share of Income,
Complete Form 8810, Corporate Passive Activity Loss
Deductions, Credits, etc., box 15 (code L);
and Credit Limitations, to determine the allowed credit that
Schedule K-1 (Form 1120S), Shareholder’s Share of
must be allocated between the cooperative and the
Income, Deductions, Credits, etc., box 13 (code L);
patrons. For details, see the Instructions for Form 8810.
Schedule K-1 (Form 1041), Beneficiary’s Share of
Income, Deductions, Credits, etc., box 13 (code K); and
Estates and trusts. Allocate the empowerment zone
Form 1099-PATR, Taxable Distributions Received
employment credit on line 4 between the estate or trust
From Cooperatives, box 10, or other notice of credit
and the beneficiaries in the same proportion as income
allocation.
was allocated and enter the beneficiaries' share on line 5.
If the estate or trust is subject to the passive activity rules,
Partnerships and S corporations must report the above
include on line 3 any empowerment zone and renewal
credits on line 3. Also, estates and trusts that can allocate
community employment credits from passive activities
the above credits to beneficiaries and cooperatives that
disallowed for prior years and carried forward to this year.
can allocate the above credits to patrons must report
Complete Form 8582-CR, Passive Activity Credit
these credits on line 3. All other filers figuring a separate
Limitations, to determine the allowed credit that must be
credit on earlier lines must report the above credits on
allocated between the estate or trust and the
line 3. All others not using earlier lines to figure a separate
beneficiaries. For details, see the Instructions for Form
credit can report the above credits directly on Form 3800,
8582-CR.
Part III, line 3.
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.
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 and business taxpayers filing this form is approved under OMB control number 1545-0074 and 1545-0123
and is included in the estimates shown in the instructions for their individual and business income tax return. The
estimated burden for all other taxpayers who file this form is shown below.
Recordkeeping
4 hr., 4 min.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Learning about the law or the form
2 hr., 22 min.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Preparing and sending the form to the IRS
2 hr., 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.
-3-
Instructions for Form 8844 (2017)

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