Greece NY Employee Retention Ertc 2021

 
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 debate in the tax professional neighborhood today. I'm not going to hang my hat on any one position until we get more information from the IRS on this, but if I had to lean one method or the other, I would lean in the direction of stating that owner salaries in so far as we're discussing someone who owns more than 50 percent of the business, do not certify.
  
 
Exactly How It Works
I do not want to get too technical here, but Section 2301(e) of the CARES Act -- which developed the employee retention credit -- states that for functions of the employee retention credit, "guidelines comparable to the guideline of areas 51(i)( 1) and 280C(a) of the Internal Revenue Code of 1986 shall apply," do not get captured up on the 1986, that's just the last time the Internal Revenue Code had a major overhaul, so it's just referred to as the Internal Earnings Code of 1986. The essential part here is those other code areas reference.

Let's start with 280C(a) because that's the simple one. That is simply stating that if you get a credit on some earnings you pay in your organization, you can't double dip and take a deduction for those very same salaries. Today let's discuss area 51(i)( 1 ), which says, "No incomes will be considered ...

with respect to an individual who bears any of the relationships explained 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, directly 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 individual who owns, directly or indirectly, more than 50 percent of the capital and earnings interests in the entity." So 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.Let's focus on the clause that says "if the taxpayer is a corporation" because we're assuming an S corp taxpayer here.That is just stating that if you get a credit on some incomes you pay in your business, you can't double dip and take a deduction for those same earnings. Let's focus on the stipulation 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 salaries with respect to a person who owns, straight or indirectly, more than 50 percent in value of the outstanding stock of the corporation. This is stating that you do not take into account wages with regard to a person who owns, straight or indirectly, more than 50 percent in worth of the impressive stock of the corporation. That seems clear to me that owner salaries do not certify. Now, some tax specialists are looking at the employee retention credit qualified wages FAQs on the IRS website, and they're looking at FAQ 59, which states, "Are salaries paid by a company to staff members who belong individuals thought about qualified earnings?

" and they're saying, "Look at the response here. It's only these family members whose salaries do not count. And the IRS didn't particularly state owner salaries or partner salaries do not count here, so bad-a-boo, bad-a-bing, for that reason owner earnings must 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 qualify. It's only these family members whose wages do not count. The IRS site is not the tax code.