Clarkstown NY Employee Retention Credit Eligibility

 
Can you take the employee retention credit on the incomes paid of your S corporation to you, the 100% owner? Now, this is a huge dispute in the tax professional neighborhood today. I'm not going to hang my hat on any one position till we get more information from the IRS on this, but if I needed to lean one method or the other, I would lean in the direction of saying that owner incomes in so far as we're discussing somebody who owns more than 50 percent of business, do not certify.
  
 
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I do not want to get too technical here, however Area 2301(e) of the CARES Act -- which created the employee retention credit -- says that for purposes of the employee retention credit, "guidelines similar to the guideline of areas 51(i)( 1) and 280C(a) of the Internal Profits Code of 1986 shall apply," do not get caught up on the 1986, that's simply the last time the Internal Revenue Code had a significant overhaul, so it's just referred to as the Internal Income Code of 1986. The crucial part here is those other code sections referral.

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

with respect to an individual who person any of the relationships described in subparagraphs (A) through (G) of section 152Aread)( 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 exceptional the corporation, or, if the taxpayer is an entity other than a corporation, to any individual who owns, directly or indirectly, more than 50 percent of the capital and profits interests revenues the entity." So let's concentrate on the clause that says "if the taxpayer is a corporation" due to the fact that 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 presuming an S corp taxpayer here.That is just saying that if you get a credit on some salaries you pay in your business, you can't double dip and take a reduction for those very same salaries. Let's focus on the clause that says "if the taxpayer is a corporation" because we're presuming an S corp taxpayer here.

So this is saying that you do not take into account earnings with regard to a person who owns, directly or indirectly, more than 50 percent in worth of the impressive stock of the corporation. This is saying that you don't take into account salaries with regard to a person 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 earnings do not qualify. Now, some tax experts are looking at the employee retention credit qualified incomes FAQs on the IRS website, and they're looking at FAQ 59, which says, "Are salaries paid by an employer to employees who belong people thought about qualified incomes?

" and they're saying, "Look at the answer here. It's only these loved ones whose incomes don't count. And the IRS didn't specifically say owner salaries or spouse earnings do not count here, so bad-a-boo, bad-a-bing, therefore owner wages need to count." To that, I would say, "Look. The IRS site is not the tax code. That seems clear to me that owner incomes do not certify. It's only these loved ones whose incomes do not count. The IRS website is not the tax code.