ITG FAQ #10 Answer-What effect does a qualified employee's termination have on the Indian Employment Credit?


Notice: Historical Content

This is an archival or historical document and may not reflect current law, policies or procedures.

If an otherwise qualified employee is terminated sooner than one year after the date of initial employment, the credit cannot be claimed for that employee for the tax year the employment is terminated. You may also have to recapture credits allowed in earlier years. These rules do not apply in the following situations:

  • The employee voluntarily quits
  • The employee is terminated because of misconduct
  • The employee becomes disabled. However, if the disability ends before the end of the first year of employment, you must offer reemployment to the former employee

Note: The Indian employment credit will expire for qualified wages and health care costs paid or incurred in tax years beginning after 2021.

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