Bayside NY Employee Retention Ertc Filing

 
Can you take the employee retention credit on the salaries paid of your S corporation to you, the 100% owner? Now, this is a big argument in the tax professional community today. I'm not going to hang my hat on any one position up until we get more clarification from the IRS on this, but if I needed to lean one method or the other, I would lean in the instructions of stating that owner wages in so far as we're speaking about someone who owns more than 50 percent of the business, do not qualify.
  
 
Just how It Works
I do not wish to get too technical here, but Section 2301(e) of the CARES Act -- which developed the employee retention credit -- says that for functions of the employee retention credit, "guidelines comparable to the guideline of sections 51(i)( 1) and 280C(a) of the Internal Profits Code of 1986 shall apply," don't get caught up on the 1986, that's simply the last time the Internal Earnings Code had a major overhaul, so it's simply described as the Internal Income Code of 1986. The fundamental part here is those other code areas referral.

Let's start with 280C(a) since that's the simple one. That is just saying that if you get a credit on some earnings you pay in your service, you can't double dip and take a reduction for those very same salaries. Now let's talk about area 51(i)( 1 ), which states, "No earnings shall be taken into account ...

with respect to an individual who bears any of the relationships described in subparagraphs (A) through (G) of section 152(d)( 2) to the taxpayer, or, if the taxpayer is a corporation, to an individual who person, directly or indirectly, more than 50 percent in value of the outstanding stock impressive the corporation, or, if the taxpayer is an entity other than a corporation, to any individual who owns, directly or straight, more than 50 percent of the capital and profits interests revenues the entity." So let's concentrate on the provision that says "if the taxpayer is a corporation" because we're presuming an S corp taxpayer here.Let's focus on the clause that states "if the taxpayer is a corporation" because 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 company, you can't double dip and take a deduction for those very same earnings. Let's focus on the clause that states "if the taxpayer is a corporation" due to the fact that we're presuming an S corp taxpayer here.

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

" and they're stating, "Look at the answer here. It's only these relatives whose earnings do not count. And the IRS didn't specifically say owner salaries or spouse wages do not count here, so bad-a-boo, bad-a-bing, for that reason owner wages must count." To that, I would state, "Look. The IRS site is not the tax code. That appears clear to me that owner incomes do not qualify. It's only these relatives whose earnings don't count. The IRS site is not the tax code.