Greece NY Employee Retention 2021 Erc Qualifications

 
Can you take the employee retention credit on the earnings paid of your S corporation to you, the 100% owner? Now, this is a huge dispute in the tax expert community today. I'm not going to hang my hat on any one position up until we get more information from the IRS on this, but if I had to lean one way or the other, I would lean in the direction of stating that owner salaries in so far as we're talking about somebody who owns more than 50 percent of business, do not certify.
  
 
Just how It Functions
I don't wish 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 comparable to the rule of sections 51(i)( 1) and 280C(a) of the Internal Profits Code of 1986 will use," don't get caught up on the 1986, that's simply the last time the Internal Profits Code had a major overhaul, so it's simply described as the Internal Earnings Code of 1986. The fundamental part here is those other code sections referral.

Let's begin with 280C(a) because that's the simple one. That is just saying that if you get a credit on some earnings you pay in your organization, you can't double dip and take a reduction for those same salaries. But now let's discuss section 51(i)( 1 ), which states, "No earnings 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 worth of the outstanding stock of the corporation, or, if the taxpayer is an entity aside from a corporation, to any person who owns, directly 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" because we're presuming 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 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 very same salaries. 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.

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

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