Clay NY Employee Retention 2020 Ertc Qualifications

 
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 community right now. 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 direction of saying that owner salaries in so far as we're talking about somebody who owns more than 50 percent of the company, do not certify.
  
 
Just how It Functions
I do not want to get too technical here, however Section 2301(e) of the CARES Act -- which created the employee retention credit -- states that for functions of the employee retention credit, "guidelines similar to the rule of sections 51(i)( 1) and 280C(a) of the Internal Earnings Code of 1986 will use," do not get captured up on the 1986, that's simply the last time the Internal Income Code had a significant overhaul, so it's simply described as the Internal Earnings Code of 1986. The fundamental part here is those other code areas referral.

Because that's the easy one, let's begin with 280C(a). That is just stating that if you get a credit on some incomes you pay in your service, you can't double dip and take a reduction for those exact same incomes. However now let's discuss section 51(i)( 1 ), which states, "No incomes will be taken into consideration ...

with regard to a person who bears any of the relationships described in subparagraphs (A) through (G) of area 152(d)( 2) to the taxpayer, or, if the taxpayer is a corporation, to a person who owns, straight or indirectly, more than 50 percent in value 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 revenues interests in the entity." So let's focus on the stipulation that says "if the taxpayer is a corporation" since we're assuming an S corp taxpayer here.Let's focus on the stipulation that states "if the taxpayer is a corporation" due to the fact that we're assuming an S corp taxpayer here.That is just saying that if you get a credit on some incomes you pay in your organization, you can't double dip and take a reduction for those very same salaries. Let's focus on the provision that states "if the taxpayer is a corporation" due to the fact that we're presuming an S corp taxpayer here.

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

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