8932

Credit for Employer Differential Wage Payments

Agency
IRS
Revision
Rev. December 2021
Fillable fields
8
Pages
2
Official source
IRS form page
Checked
October 21, 2026
Fill 8932 online
Page 1 of form 8932

Form 8932: Credit for Employer Differential Wage Payments

Form 8932 is the Credit for Employer Differential Wage Payments. The About page says an employer can use this form to claim the credit for employer differential wage payments made to qualified employees after 2008. It is a business credit form, attached to the employer's tax return, and the form says the credit is part of the general business credit.

The instructions say the credit is 20% of up to $20,000 of differential wage payments paid to each qualified employee during the tax year. A differential wage payment is made 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, and represents all or a portion of the wages the employee would have received from the employer.

The instructions say to use the December 2021 revision for tax years beginning in 2021 or later, until a later revision is issued. You can fill out Form 8932 free in your browser on this page and download it without an account.

What's on Form 8932

Name and identifying number

The name(s) shown on the return and the identifying number.

Line 1: eligible payments

Eligible differential wage payments paid during the tax year.

Line 2: the 20% credit

Line 1 multiplied by 20% (0.20), with a pointer to the instructions on the wage deduction adjustment.

Line 3: pass-through credit

Credit for employer differential wage payments from partnerships, S corporations, cooperatives, estates and trusts.

Line 4: total

Lines 2 and 3 added, with routing to Schedule K for partnerships and S corporations or to Form 3800, Part III, line 1w for others.

Lines 5 and 6: allocations

For cooperatives, estates and trusts: the amount allocated to patrons or beneficiaries, and the remainder reported on Form 3800, Part III, line 1w.

How to fill out Form 8932

  1. 1

    Line 1

    Enter the total eligible differential wage payments made to qualified employees during the tax year. The instructions say not to include more than $20,000 of payments for any employee.

  2. 2

    Line 2

    Multiply line 1 by 20%. The instructions say the deduction for salaries and wages is generally reduced by the line 2 amount, even if the full credit cannot be taken this year.

  3. 3

    Line 3

    Enter credits from Schedule K-1 (Form 1065) box 15 code P, Schedule K-1 (Form 1120-S) box 13 code P, Schedule K-1 (Form 1041) box 13 code Q, or Form 1099-PATR box 12.

  4. 4

    Line 4

    Add lines 2 and 3. Partnerships and S corporations stop and report on Schedule K. Cooperatives, estates and trusts go to line 5. All others report on Form 3800, Part III, line 1w.

  5. 5

    Lines 5 and 6

    Enter the amount allocated to patrons or beneficiaries on line 5, subtract it from line 4, and report line 6 on Form 3800, Part III, line 1w.

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Filing Form 8932 and key rules

Attach to your return

The form says to attach it to your tax return.

Qualified employee

The instructions say a qualified employee is a person who has been an employee for the 91-day period immediately preceding the period for which any differential wage payment is made.

Payments not counted

The instructions say certain wage payments used for the employee retention credit, the credit for qualified sick and family leave wages, or Form 5884-A are not differential wage payments.

Other credits reduced

The instructions say any research credit or orphan drug credit for compensation paid to an employee is reduced by the differential wage payment credit figured for that employee.

When no credit is allowed

No credit is allowed for any tax year in which the taxpayer is under a final order of a U.S. district court under section 4323 of title 38 for a violation of chapter 43, and for the 2 succeeding tax years.

Controlled groups

The instructions say all persons treated as a single employer under subsection (b), (c), (m) or (o) of section 414 are treated as a single employer.

Related forms

Who files Form 8932?

  • Employers paying differential wages

    An employer that makes differential wage payments to qualified employees serving on active duty for more than 30 days figures the credit on lines 1 and 2.

  • Partnerships and S corporations

    The form says partnerships, S corporations, cooperatives, estates and trusts must file this form to claim the credit. Partnerships and S corporations report line 4 on Schedule K.

  • Cooperatives

    A cooperative allocates to its patrons the credit in excess of its tax liability limit and enters that amount on line 5.

  • Estates and trusts

    An estate or trust allocates the credit between itself and its beneficiaries in the same proportion as income and enters the beneficiaries' share on line 5.

  • Partners and shareholders

    The form says other taxpayers are not required to file it if their only source for the credit is a partnership, S corporation, cooperative, estate or trust. They can report it on Form 3800.

The form is completed by employers and pass-through entities, not by the employees who receive the payments.

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Questions about Form 8932

How much is the differential wage payment credit?

The instructions say it is 20% of up to $20,000 of differential wage payments paid to each qualified employee during the tax year.

What is a differential wage payment?

A payment to a qualified employee for a period of active duty in the uniformed services of more than 30 days that represents all or part of the wages the employee would have received from the employer.

What counts as the uniformed services?

The instructions list the Armed Forces, the Army and Air National Guard in certain duty, the commissioned corps of the Public Health Service, and others designated by the President in time of war or national emergency.

Do partners or shareholders file Form 8932?

The form says other taxpayers are not required to file it if their only source for the credit is a pass-through entity. They can report it directly on Form 3800.

Does an employee fill out Form 8932?

No. The About page says an employer uses this form to claim the credit for payments made to qualified employees.

Which revision of Form 8932 applies?

The instructions say to use the December 2021 revision for tax years beginning in 2021 or later, until a later revision is issued, and prior revisions for earlier years.