Instructions for Form 8845, Indian Employment Credit

• Issuer: Treasury Department
• Section: Treasury Department

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Instructions for Form 8845

(Rev. January 2022)

Indian Employment Credit

Department of the Treasury

Internal Revenue Service

Section references are to the Internal Revenue Code

unless otherwise noted.

Future Developments

For the latest information about developments related to

Form 8845 and its instructions, such as legislation

enacted after they were published, go to

IRS.gov/Form8845.

What’s New

Credit extension. The Taxpayer Certainty and Disaster

Tax Relief Act of 2020 extended the Indian employment

credit to cover qualified wages and qualified employee

health insurance costs paid or incurred in tax years

beginning in 2021.

Coronavirus-related employee retention credit. You

may claim an employee retention credit on an

employment tax return such as Form 941, Employer's

QUARTERLY Federal Tax Return. Wages paid after

December 31, 2020, and before July 1, 2021, and used to

figure this coronavirus-related employee retention credit

can't also be used to figure a credit on Form 8845. See

Qualified Wages.

Credit for qualified sick and family leave wages. You

may claim a credit for qualified sick and family leave

wages on an employment tax return such as Form 941.

Wages paid after March 31, 2021, and before October 1,

2021, and used to figure that credit, can't also be used to

figure a credit on Form 8845. See Qualified Wages.

Disaster-related employee retention credit. You may

claim a 2020 qualified disaster employee retention credit

on Form 5884-A, Employee Retention Credit for

Employers Affected by Qualified Disasters. Wages used

to figure that disaster-related employee retention credit

can't also be used to figure a credit on Form 8845. See

Qualified Wages.

Employee retention credit. Wages paid after June 30,

2021, and before January 1, 2022, and used to figure the

Indian employment credit can’t also be used to figure a

coronavirus-related employee retention credit.

General Instructions

Purpose of Form

Use Form 8845 to claim the Indian employment credit if

you paid or incurred qualified wages and/or qualified

employee health insurance costs to/for a qualified

employee during your tax year.

Partnerships, S corporations, cooperatives, estates,

and trusts must file this form to claim the credit. All others

aren’t required to complete or file this form if their only

source for this credit is a partnership, S corporation,

cooperative, estate, or trust. Instead, they can report this

credit directly on Form 3800, General Business Credit.

Qualified Wages

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

doesn’t include wages attributable to services rendered

during the 1-year period (if applicable, 2-year period if

employee is a long-term family assistance recipient under

section 51) beginning with the day the employee starts

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

in figuring the work opportunity credit on Form 5884.

Wages has the same meaning given in section 51. See

section 45A(b)(1) for details.

Qualified wages do not include:

•Wages paid to or incurred for any employee after

December 31, 2020, and before July 1, 2021, if you use

the same wages to claim the employee retention credit on

an employment tax return such as Form 941;

•Wages paid to or incurred for any employee after March

31, 2021, and before October 1, 2021, if you use the

same wages to claim the credit for qualified sick and

family leave wages on an employment tax return such as

Form 941; and

•Wages paid to or incurred for any employee generally

after December 27, 2019, and before April 17, 2021, if you

use the same wages to claim the 2020 qualified disaster

employee retention credit on Form 5884-A.

Information about any future disaster credits that

reduce qualified wages may be posted under "Recent

Developments" at IRS.gov/Form8845.

Qualified Employee Health Insurance

Costs

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 employee. Don’t include amounts paid or

incurred for health insurance under a salary reduction

agreement.

Qualified Employee

Qualified employee means, for any tax period, any

employee who meets all three of the following tests.

1.The employee is an enrolled member, or the

spouse of an enrolled member, of an Indian tribe. Each

tribe determines who qualifies for enrollment and what

documentation, if any, is issued as proof of enrollment

status. Examples of appropriate documentation will vary

from one tribe to another and may include a tribal

membership card, Certified Degree of Indian Blood

(CDIB) card, or letter from the tribe or tribal enrollment

Jan 07, 2022Cat. No. 66389C