Irondequoit NY Employee Retention Credit Application

 
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 argument in the tax professional neighborhood today. I'm not going to hang my hat on any one position up until we get more information 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 earnings in so far as we're talking about someone who owns more than 50 percent of the service, do not qualify.
  
 
Exactly How It Functions
I do not wish to get too technical here, however Area 2301(e) of the CARES Act -- which developed the employee retention credit -- says that for functions of the employee retention credit, "rules similar to the guideline of areas 51(i)( 1) and 280C(a) of the Internal Revenue Code of 1986 will use," don't get captured up on the 1986, that's simply the last time the Internal Earnings Code had a major overhaul, so it's just described as the Internal Earnings Code of 1986. The vital part here is those other code sections referral.

Let's start with 280C(a) since that's the simple one. That is just saying that if you get a credit on some earnings you pay in your service, you can't double dip and take a deduction for those same incomes. Now let's talk about area 51(i)( 1 ), which states, "No wages shall be taken into account ...

with respect to an individual who bears any of the relationships described in explained (A) through (G) of section 152Aread)( 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 straight, more than 50 percent of the capital and profits interests revenues the entity." So let's focus on the provision that says "if the taxpayer is a corporation" since we're presuming 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 presuming an S corp taxpayer here.That is just stating that if you get a credit on some earnings you pay in your service, you can't double dip and take a deduction for those same incomes. Let's focus on the clause that says "if the taxpayer is a corporation" because we're assuming an S corp taxpayer here.

So this is stating that you do not take into account incomes with respect to an individual who owns, directly or indirectly, more than 50 percent in value of the outstanding stock of the corporation. This is saying that you don't take into account incomes with respect to a person 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 experts are taking a look at the employee retention credit qualified salaries FAQs on the IRS site, and they're looking at FAQ 59, which states, "Are incomes paid by an employer to staff members who belong people thought about certified earnings?

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