Indian Employment Credit

AAA

DEFINITION of 'Indian Employment Credit'

A monetary incentive offered by the federal government for employers to hire registered Native American Indians and spouses of registered Native American Indians who live on or near an Indian reservation and work for an employer on that reservation. The tax credit provides a dollar-for-dollar reduction in the business's taxable income.

INVESTOPEDIA EXPLAINS 'Indian Employment Credit'

Some Native American Indian employees will not qualify the employer for the tax credit, including those whose wages from the company do not meet a certain threshold specified by the Internal Revenue Service, those who are 5% owners of the company and those whose work is related to certain gaming activities. Employers must use IRS form 8845, Indian Employment Credit, to claim the credit.

RELATED TERMS
  1. Business Tax Credits

    A number of federal income tax credits available to businesses ...
  2. Work Opportunity Tax Credit

    A separate, nonrefundable credit that is part of the general ...
  3. Tax Credit

    An amount of money that a taxpayer is able to subtract from the ...
  4. Non-Refundable Tax Credit

    A tax credit that can't reduce the amount of tax owed to less ...
  5. Payroll Tax

    Tax an employer withholds and/or pays on behalf of their employees ...
  6. Working Tax Credit (WTC)

    A tax credit offered to low-income individuals working in the ...
RELATED FAQS
  1. Can I get a tax credit from conducting research and development?

    It is possible for a company to qualify for a research and development tax credit for conducting research and development. ... Read Full Answer >>
  2. What is the difference between MAGI (modified adjusted gross income) and adjusted ...

    Calculating personal income tax correctly involves understanding two important tax terms: adjusted gross income (AGI) and ... Read Full Answer >>
  3. What is the difference between a regressive tax versus a progressive tax?

    A progressive tax is one that increases along with an individual's ability to pay the tax, while a regressive tax doesn't ... Read Full Answer >>
  4. What are some ways to minimize tax liability?

    Minimizing tax liability is one of the most important financial planning aspects for business owners and individuals each ... Read Full Answer >>
  5. What are the most common market indicators to follow the Indian stock market and ...

    The Indian stock market has two major exchanges. The number of additional market indicators for the South Asian nation has ... Read Full Answer >>
  6. What deductions, credits and exemptions depend on gross income calculations?

    The greatest challenge in determining your total tax liability stems from an incomplete understanding of what income figure ... Read Full Answer >>
Related Articles
  1. Entrepreneurship

    Tax Credit For Plan Expenses Incurred By Small Businesses

    Determine whether your business is eligible to claim a tax credit for establishing a retirement plan.
  2. Savings

    Saver's Tax Credit: A Retirement Savings Incentive

    Here's another reason to put money toward your retirement nest egg.
  3. Taxes

    Get A Tax Credit For Your Foreign Investments

    The foreign tax credit provides a break on investment income made and taxed in a foreign country.
  4. Taxes

    5 Tax Credits You Shouldn't Miss

    If you're not taking advantage of these deductions, you could be missing out on tax savings.
  5. Taxes

    Give Your Taxes Some Credit

    A few tax credits can greatly increase the amount of money you get back on your return.
  6. Professionals

    How Going Green Can Cut Your Taxes

    Investors looking to improve their bottom line via green investing without risk should take advantage of these tax credits.
  7. Markets

    Indian Tech Startups Eye The Future With Visual Recognition

    Using visual recognition technology, Indian tech companies are hoping to help online merchants close more sales from consumers who are on mobile devices.
  8. Taxes

    What is Adjusted Gross Income?

    Adjusted gross income (AGI) is a term from the Internal Revenue Code. AGI is used to determine a person’s income taxes due.
  9. Chart Advisor

    Invest in India with These 2 ETFs

    The growing middle class in India is one of the strongest macro-level themes found anywhere and should be a key driver of investment over coming decades.
  10. Economics

    Countries Most Affected By A Strong U.S. Dollar

    The U.S. dollar is still the most important currency in the world. It's used for trade, foreign reserves, and as a substitute for the gold standard. As the U.S. dollar continues to grow stronger, ...

You May Also Like

Hot Definitions
  1. Investopedia

    One of the best-known sources of financial information on the internet. Investopedia is a resource for investors, consumers ...
  2. Unfair Claims Practice

    The improper avoidance of a claim by an insurer or an attempt to reduce the size of the claim. By engaging in unfair claims ...
  3. Killer Bees

    An individual or firm that helps a company fend off a takeover attempt. A killer bee uses defensive strategies to keep an ...
  4. Sin Tax

    A state-sponsored tax that is added to products or services that are seen as vices, such as alcohol, tobacco and gambling. ...
  5. Grandfathered Activities

    Nonbank activities, some of which would normally not be permissible for bank holding companies and foreign banks in the United ...
  6. Touchline

    The highest price that a buyer of a particular security is willing to pay and the lowest price at which a seller is willing ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!