Clay NY Employee Retention Credit Eligibility

 
Can you take the employee retention credit on the wages paid of your S corporation to you, the 100% owner? Now, this is a big dispute in the tax professional community right now. I'm not going to hang my hat on any one position up until we get more explanation from the IRS on this, however if I had to lean one method or the other, I would lean in the instructions of stating that owner incomes in so far as we're speaking about someone who owns more than 50 percent of business, do not certify.
  
 
Exactly How It Functions
I don't wish to get too technical here, however 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 use," do not get caught up on the 1986, that's just the last time the Internal Income Code had a major overhaul, so it's just described as the Internal Revenue Code of 1986. The important part here is those other code sections referral.

Since that's the simple one, let's start with 280C(a). That is simply saying 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 same earnings. Now let's talk about area 51(i)( 1 ), which says, "No incomes shall be taken into account ...

with respect to an individual who bears any of the relationships described in explained (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 worth outstanding stock of 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 states "if the taxpayer is a corporation" because we're assuming an S corp taxpayer here.Let's focus on the stipulation that states "if the taxpayer is a corporation" because we're presuming an S corp taxpayer here.That is simply saying 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 very same incomes. Let's focus on the stipulation that says "if the taxpayer is a corporation" since we're presuming an S corp taxpayer here.

So this is stating that you do not take into consideration earnings with regard to an individual who owns, directly or indirectly, more than 50 percent in worth of the outstanding stock of the corporation. This is saying that you do not take into account wages with regard to an individual who owns, straight or indirectly, more than 50 percent in worth of the exceptional stock of the corporation. That appears clear to me that owner wages do not qualify. Now, some tax specialists are taking a look at the employee retention credit qualified earnings FAQs on the IRS website, and they're taking a look at FAQ 59, which says, "Are earnings paid by an employer to employees who belong people considered certified salaries?

" and they're stating, "Look at the answer here. It's only these relatives whose incomes don't count. And the IRS didn't particularly state owner earnings or partner incomes don't count here, so bad-a-boo, bad-a-bing, for that reason owner earnings must 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 incomes don't count. The IRS website is not the tax code.