Employee tip credit on Form 3800

[cpr1955]

I have a client who owns some restaurants and has general business credits from SS and Medicare taxes paid on tips. If I am understanding IRS regs correctly, the credit must be carried back one year. When I imported my K-1 data, the credit was automatically entered on Form 3800 and applied to the current tax year.

I want to carry the credit back to 2014, but cannot figure out how to prevent the credit being applied to 2015 without doing overrides.

 

[Gail in Virginia]

I have not actually had anyone able to take the credit because of the minimum wage portion of the provision, BUT it is my understanding that the carry-back/carry-forward rules only come into play if there is no income tax in the current year.  In other words, the credit applies first to 2015 and is not refundable; so if it is not used up you would carry any remaining credit back one year and any left after that may be carried forward for twenty years.  IRS has informational sheet at IRS page.

You might find that helpful.

[cpr1955]

Great - thank you!