Albany NY Employee Retention Ertc Credit

 
Can you take the employee retention credit on the wages paid of your S corporation to you, the 100% owner? Now, this is a huge argument in the tax professional neighborhood today. I'm not going to hang my hat on any one position till we get more clarification from the IRS on this, but if I needed to lean one way or the other, I would lean in the instructions of stating that owner wages in so far as we're talking about someone who owns more than 50 percent of the company, do not qualify.
  
 
Just how It Functions
I don't want to get too technical here, however Section 2301(e) of the CARES Act -- which produced the employee retention credit -- states that for functions of the employee retention credit, "guidelines similar to the rule of areas 51(i)( 1) and 280C(a) of the Internal Income Code of 1986 shall use," do not get caught up on the 1986, that's just the last time the Internal Revenue Code had a major overhaul, so it's simply referred to as the Internal Earnings Code of 1986. The crucial part here is those other code sections reference.

Because that's the simple one, let's start with 280C(a). That is just stating that if you get a credit on some salaries you pay in your company, you can't double dip and take a deduction for those exact same salaries. And now let's discuss area 51(i)( 1 ), which states, "No incomes will be considered ...

with respect to a person who bears any of the relationships explained in subparagraphs (A) through (G) of section 152(d)( 2) to the taxpayer, or, if the taxpayer is a corporation, to an individual who owns, directly or indirectly, more than 50 percent in worth of the exceptional stock of the corporation, or, if the taxpayer is an entity aside from a corporation, to any person who owns, straight or indirectly, more than 50 percent of the capital and earnings interests in the entity." So let's concentrate on the stipulation that states "if the taxpayer is a corporation" since we're presuming an S corp taxpayer here.Let's focus on the clause that says "if the taxpayer is a corporation" due to the fact that we're assuming an S corp taxpayer here.That is simply stating that if you get a credit on some wages you pay in your business, you can't double dip and take a deduction for those same wages. Let's focus on the clause that states "if the taxpayer is a corporation" because we're assuming an S corp taxpayer here.

So this is stating that you don't take into consideration earnings with respect to an individual who owns, directly or indirectly, more than 50 percent in value of the impressive stock of the corporation. This is saying that you do not take into account earnings with regard to an individual who owns, straight or indirectly, more than 50 percent in value of the exceptional stock of the corporation. That seems clear to me that owner incomes do not certify. Now, some tax experts are looking at the employee retention credit qualified incomes FAQs on the IRS website, and they're taking a look at FAQ 59, which says, "Are wages paid by a company to staff members who relate individuals thought about certified salaries?

" and they're stating, "Look at the response here. It's just these loved ones whose earnings don't count. And the IRS didn't particularly say owner earnings or partner salaries don't count here, so bad-a-boo, bad-a-bing, therefore owner wages need to count." To that, I would state, "Look. The IRS site is not the tax code. That seems clear to me that owner incomes do not qualify. It's just these relatives whose salaries do not count. The IRS website is not the tax code.