Form 8882 Instructions Details

Do you know what Form 8882 is? Chances are, if you are a US citizen or permanent resident, and have ever had anything to do with an investment, you've filled out this form at least once in your life. But what is Form 8882, and why is it so important? In this post, we will break down the purpose of Form 8882 and discuss some of the ways it can benefit taxpayers.

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QuestionAnswer
Form NameForm 8882
Form Length3 pages
Fillable?Yes
Fillable fields49
Avg. time to fill out10 min 33 sec
Other namesform 8882, 2004, K-1, 8882 form

Form Preview Example

Form 8882

Credit for Employer-Provided Childcare

 

OMB No. 1545-1809

 

 

 

2004

 

Facilities and Services

 

Department of the Treasury

 

 

Attachment

Internal Revenue Service

Attach to your tax return.

 

Sequence No.131

Name(s) shown on return

 

Identifying number

 

 

 

 

Part I Current Year Credit (Members of controlled groups or businesses under common control, see instructions.)

1Qualified childcare facility expenditures paid or incurred (see

 

instructions)

1

 

 

2

Enter 25% (.25) of line 1

 

 

 

3

Qualified childcare resource and referral expenditures paid or incurred

3

 

 

4Enter 10% (.10) of line 3

5Form 8882 credits from pass-through entities (if more than one entity, see instructions):

 

If you are a—

 

Then enter the total of the current year credits from—

 

a

Shareholder

 

Schedule K-1

(Form 1120S), box 13, code G, H, or V

 

b Partner

 

Schedule K-1

(Form 1065), box 15, code G, H, or U

 

c

Beneficiary

 

Schedule K-1 (Form 1041), line 14

EIN of pass-through entity

 

 

6Add lines 2, 4, and 5

7Current year credit. Enter the smaller of line 6 or $150,000 (S corporations, partnerships, estates, and trusts, see instructions)

2

4

5

6

7

Part II Allowable Credit (See Who must file Form 3800 to find out if you complete Part II or file Form 3800.)

8Regular tax before credits:

Individuals. Enter the amount from Form 1040, line 43

Corporations. Enter the amount from Form 1120, Schedule J, line 3; Form 1120-A,

 

Part I, line 1; or the applicable line of your return

Estates and trusts. Enter the sum of the amounts from Form 1041, Schedule G, lines 1a

 

and 1b, or the amount from the applicable line of your return

9Alternative minimum tax:

Individuals. Enter the amount from Form 6251, line 35

 

 

Corporations. Enter the amount from Form 4626, line 14

 

 

Estates and trusts. Enter the amount from Form 1041, Schedule I, line 56

10

Add lines 8 and 9

 

 

 

 

11a

Foreign tax credit

 

11a

 

 

 

 

 

b

Credits from Form 1040, lines 47 through 53

 

11b

 

 

c

Possessions tax credit (Form 5735, line 17 or 27)

 

11c

 

 

d

Credit for fuel from a nonconventional source

 

11d

 

 

e

Qualified electric vehicle credit (Form 8834, line 20)

 

11e

 

 

fAdd lines 11a through 11e

12Net income tax. Subtract line 11f from line 10. If zero, skip lines 13 through 16 and enter -0- on line 17

13 Net regular tax. Subtract line 11f from line 8. If zero or less, enter -0-

13

14Enter 25% (.25) of the excess, if any, of line 13 over $25,000 (see

instructions)

14

15Tentative minimum tax (see instructions):

Individuals. Enter the amount from Form 6251, line 33

 

Corporations. Enter the amount from Form 4626, line 12

15

Estates and trusts. Enter the amount from Form 1041,

 

 

Schedule I, line 54

 

16Enter the greater of line 14 or line 15

17Subtract line 16 from line 12. If zero or less, enter -0-

18Credit allowed for the current year. Enter the smaller of line 7 or line 17 here and on Form 1040, line 54; Form 1120, Schedule J, line 6d; Form 1120-A, Part I, line 2; Form 1041, Schedule G, line 2c; or the applicable line of your return. If line 17 is smaller than line 7, see instructions

8

9

10

11f

12

16

17

18

For Paperwork Reduction Act Notice, see page 3.

Cat. No. 33436Y

Form 8882 (2004)

Form 8882 (2004)

Page 2

General Instructions

SECTION REFERENCES ARE TO THE INTER NAL REVENUE CODE.

Purpose of Form

Employers use Form 8882 to claim the credit for qualified childcare facility and resource and referral expenditures. The credit is part of the general business credit. You may claim the credit any time within 3 years from the due date of your return on either an original or amended return.

How To Figure the Credit

The credit is 25% of the qualified childcare facility expenditures plus 10% of the qualified childcare resource and referral expenditures paid or incurred during the tax year. The credit is limited to $150,000 per tax year.

Qualified childcare facility expenditures are amounts paid or incurred:

To acquire, construct, rehabilitate, or expand property that:

1.Is to be used as part of a qualified childcare facility of the taxpayer,

2.Is depreciable (or amortizable) property, and

3.Is not part of the principal residence of the taxpayer or any employee of the taxpayer;

For the operating expenses of a qualified childcare facility of the taxpayer, including expenses for training of employees, scholarship programs, and providing increased compensation to employees with higher levels of childcare training; or

Under a contract with a qualified childcare facility to provide childcare services to employees of the taxpayer.

Note. Any expenses for childcare included in qualified childcare facility expenditures may not exceed the fair market value of such care.

A qualified childcare facility is a facility that meets the requirements of all applicable laws and regulations of the state or local government in which it is located, including the licensing of the facility as a childcare facility. The following conditions must also be met.

The principal use of the facility must be to provide childcare (unless the facility is also the personal residence of the person operating the facility).

Enrollment in the facility must be open to employees of the taxpayer during the tax year.

If the facility is the principal trade or business of the taxpayer, at least 30% of the enrollees of the facility must be dependents of employees of the taxpayer.

The use of the facility (or the eligiblity to use the facility) must not discriminate in favor of highly compensated employees.

Qualified childcare resource and referral expenditures are amounts paid or incurred under a contract to provide childcare resource and referral services to employees of the taxpayer. The provision of the services (or the eligibility to use the services) must not discriminate in favor of highly compensated employees.

No Double Benefit Allowed

You must reduce:

The basis of any qualified childcare facility by the amount of the credit on line 7 allocable to capital expenditures related to the facility,

Any otherwise allowable deductions used to figure the credit by the amount of the credit on line 7 allocable to those deductions, and

Any expenditures used to figure any other credit by the amount of the credit on line 7 allocable to those expenditures (for purposes of figuring the other credit).

Note. For credits entered on line 5, only the pass-through entity is required to make this reduction.

Recapture of Credit

You may have to recapture part or all of the credit if, before the 10th tax year after the tax year in which your qualified childcare facility is placed in service, the facility ceases to operate as a qualified childcare facility or there is a change in ownership of the facility. However, a change in ownership will not require recapture if the person acquiring the interest in the facility agrees, in writing, to assume the recapture liability. See section 45F(d) for details.

Any recapture tax is reported on the line of your tax return where other recapture taxes are reported (or, if no such line, on the “total tax” line). The recapture tax may not be used in figuring the amount of any credit or in figuring the alternative minimum tax.

Controlled Groups

All members of a controlled group of corporations (within the meaning of section 52(a)) and all partnerships, corporations, unincorporated businesses, and other persons under common control (within the meaning of section 52(b)) are treated as one person for purposes of the credit. The group member who would have the largest credit if this rule did not apply completes Form 8882, Part I, figures the group credit on line 7, and skips Part II. On separate Forms 8882, each member (including the member who completed the group Form 8882) skips lines 1 through 6 and enters its share of the group credit on line 7. Each member then completes Part

IIon its separate form (or Form 3800, if required). Each member also must attach a statement showing how the group credit was divided among all members. The members share the credit on line 2 in the same proportion that they contributed qualified childcare facility expenditures and share the credit on line 4 in the same proportion that they contributed qualified resource and referral expenditures.

Additional Information

For more details, see section 45F.

Specific Instructions

Part I

Current Year Credit

Figure the credit for expenditures you paid on lines 1 through

4.Do not complete lines 1 through 4 for credits allocated to you from S corporations, partnerships, estates, or trusts; instead, complete line 5.

Line 1

Enter your qualified childcare facility expenditures (defined above) paid or incurred during the tax year.

Line 3

Enter your qualified childcare resource and referral expenditures (defined above) paid or incurred during the tax year.

Line 5

Enter the amount of credit that was allocated to you as a partner, shareholder, or beneficiary. Also enter the employer identification number (EIN) of the pass-through entity. If you received a credit from more than one pass-through entity, write “see attached” in the entry space for the EIN, and attach a statement showing the EIN and credit amount for each pass-through entity.

Form 8882 (2004)

Page 3

 

 

Line 7

S corporations and partnerships. Allocate the credit on line 7 among the shareholders and partners. Attach Form 8882 to the return and on Schedule K-1 show the credit for each shareholder or partner. Electing large partnerships must include this credit in “general credits.”

Estates and trusts. The credit on line 7 is allocated between the estate or trust and the beneficiaries in proportion to the income allocable to each. On the dotted line next to line 7, the estate or trust should enter its part of the total credit. Label it “1041 Portion” and use this amount in Part II (or Form 3800, if required) to figure the credit to claim on Form 1041.

Part II

Allowable Credit

The credit allowed for the current year may be limited based on your tax liability. Use Part II to figure the allowable credit unless you must file Form 3800, General Business Credit.

Who must file Form 3800. You must file Form 3800 if you have:

A credit for employer-provided childcare facilities and services from a passive activity,

More than one credit included in the general business credit (other than a credit from Form 8844, Form 8884, or Section B of Form 8835), or

A carryback or carryforward of any of those credits.

See the instructions for Form 3800 for a list of credits included in the general business credit.

Line 14

See section 38(c)(5) for special rules that apply to married couples filing separate returns, controlled corporate groups, estates, and trusts.

Line 15

Although you may not owe alternative minimum tax (AMT), you generally must still compute the tentative minimum tax (TMT) to figure your credit. For a small corporation exempt

from the AMT under section 55(e), enter zero. Otherwise, complete and attach the applicable AMT form or schedule.

Line 18

If you cannot use all of your credit because of the tax liability limit (line 17 is smaller than line 7), carry the unused credit back 1 year then forward up to 20 years. See the instructions for Form 3800 for details.

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 average time is:

Recordkeeping

6 hr., 42

min.

Learning about the law

 

 

or the form

42 min.

Preparing and sending

 

 

the form to the IRS

50

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.

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