ITG FAQ #5 Answer-Who is considered to be a "nonqualified employee"?

The following individuals are not qualified employees for purposes of the Indian Employment Credit:

  • Any employee to whom you pay or incur wages (including wages for services outside an Indian reservation) at a rate that would cause you to pay the employee more than $30,000 if the rate applied for the entire year (this wage limit may be adjusted for inflation for tax years beginning after 1999)
  • Certain related taxpayers
  • Certain dependents
  • Any 5% owner
  • Any individual who performs services involving certain gaming activities
  • Any individual who performs services in a building which houses certain gaming activities

Note: The Indian employment credit has expired for qualified wages and health care costs paid or incurred in tax years beginning after 2017.

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