Form 5884 B – Fill Out and Use This PDF

General Instructions

Section references are to the Internal Revenue Code.

Purpose of Form

Use Form 5884-B to figure your new hire retention credit for retained workers (defined later). The new hire retention credit was enacted as part of the Hiring Incentives to Restore Employment (HIRE) Act on March 18, 2010. You may be able to claim this credit if you hired a qualified employee (defined later) after February 3, 2010, and before January 1, 2011, and the employee works for you for at least 52 consecutive weeks. The credit is the smaller of $1,000 or 6.2% of the employee's wages (as defined for income tax withholding purposes) paid for the 52 consecutive week period. But you cannot claim the credit if the employee's wages decreased significantly during the second 26 weeks. The credit is claimed in the tax year in which the first 52 consecutive week period ends.

You cannot claim the new hire retention credit TIP unless the employee completes and signs Form

W-11, Hiring Incentives to Restore Employment (HIRE) Act Employee Affidavit, or similar

statement under penalties of perjury and is otherwise a qualified employee.

The new hire retention credit is part of the general business credit claimed on Form 3800, General Business Credit. No portion of the unused business credit attributable to the new hire retention credit can be carried back to any tax year beginning before March 18, 2010. However, you may be able to carry the unused portion forward. See the Instructions for Form 3800 for details.

Taxpayers, other than partnerships and S corporations, whose only source of this credit is from a partnership or an S corporation are not required to complete or file this form. Instead, report this credit directly on Form 3800.

Definitions

Retained Worker

A “retained worker” is any qualified employee (defined below):

•Who was employed by you for a period of not less than 52 consecutive weeks and

•Whose wages (as defined for income tax withholding purposes) for the second 26 consecutive weeks of employment are equal to at least 80% of the employee's wages for the first 26 consecutive weeks of employment.

Qualified Employee

A “qualified employee” is an employee who:

•Begins employment with you after February 3, 2010, and before January 1, 2011;

•Certifies by signed affidavit (Form W-11 or similar statement) under penalties of perjury, that he or she has not been employed for more than 40 hours during the 60-day period ending on the date the employee begins employment with you;

•Is not employed by you to replace another employee unless the other employee separated from employment voluntarily or for cause; and

•Is not related to you. An employee is related to you if he or she is your child or a descendent of your child, your sibling or stepsibling, your parent or an ancestor of your parent, your stepparent, your niece or nephew, your aunt or uncle, or your in-law. An employee is also related to you if he or she is related to anyone who owns more than 50% of your outstanding stock or capital and profits interest or is your dependent or a dependent of anyone who owns more than 50% of your outstanding stock or capital and profits interest.

If you are an estate or trust, see section 51(i)(1) and section 152(d)(2) for more details.

Specific Instructions

Line 11

Enter the total number of retained workers for whom you are receiving the new hire retention credit. For example, if you show the credit calculation for three employees in Part I and five employees in Part II, enter “8.”

Line 12

Enter any new hire retention credits from:

•Schedule K-1 (Form 1065), box 15 (code P); and

•Schedule K-1 (Form 1120S), box 13 (code P).

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 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.

Recordkeeping . . . .	.	.	.	.	.	.	9 hr., 34 min.
Learning about the
law or the form . . . .	.	.	.	.	.	.	.	. 40 min.
Preparing and sending
the form to the IRS . .	.	.	.	.	.	.	.	2 hr., 2 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.