Hempstead NY Employee Retention Ertc Credit

 
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 explanation from the IRS on this, however if I needed to lean one way or the other, I would lean in the instructions of saying that owner incomes in so far as we're speaking about someone who owns more than 50 percent of business, do not qualify.
  
 
How It Functions
I do not desire to get too technical here, but Area 2301(e) of the CARES Act -- which produced the employee retention credit -- says that for functions of the employee retention credit, "guidelines similar to the rule of sections 51(i)( 1) and 280C(a) of the Internal Income Code of 1986 shall use," do not get caught up on the 1986, that's simply the last time the Internal Earnings Code had a major overhaul, so it's just referred to as the Internal Revenue Code of 1986. The essential part here is those other code areas reference.

Let's begin with 280C(a) since that's the simple one. That is simply stating that if you get a credit on some salaries you pay in your organization, you can't double dip and take a reduction for those very same salaries. Now let's discuss section 51(i)( 1 ), which says, "No earnings will be taken into account ...

with regard to a person who bears any of the relationships described in subparagraphs (A) through (G) of section 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 impressive stock of the corporation, or, if the taxpayer is an entity other than a corporation, to any individual who owns, straight or indirectly, more than 50 percent of the capital and revenues interests in the entity." So let's concentrate 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 provision that states "if the taxpayer is a corporation" because we're assuming an S corp taxpayer here.That is simply saying that if you get a credit on some wages you pay in your service, you can't double dip and take a deduction for those very same incomes. 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 wages with regard to an individual who owns, straight 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, directly or indirectly, more than 50 percent in value of the outstanding stock of the corporation. That appears clear to me that owner earnings do not certify. Now, some tax professionals are taking a look at the employee retention credit qualified salaries FAQs on the IRS website, and they're looking at FAQ 59, which states, "Are earnings paid by an employer to employees who belong people considered certified salaries?

" and they're saying, "Look at the answer here. It's just these family members whose incomes do not count. And the IRS didn't particularly say owner incomes or spouse wages don't count here, so bad-a-boo, bad-a-bing, for that reason owner incomes must count." To that, I would state, "Look. The IRS site is not the tax code. That appears clear to me that owner salaries do not certify. It's just these family members whose earnings do not count. The IRS website is not the tax code.