Irondequoit NY Employee Retention Credit For Self Employed

 
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 argument in the tax expert neighborhood 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 way or the other, I would lean in the instructions of stating that owner earnings in so far as we're talking about somebody who owns more than 50 percent of business, do not qualify.
  
 
How It Functions
I do not wish to get too technical here, but Area 2301(e) of the CARES Act -- which produced the employee retention credit -- says that for purposes of the employee retention credit, "guidelines comparable to the guideline of sections 51(i)( 1) and 280C(a) of the Internal Earnings Code of 1986 shall apply," do not get caught up on the 1986, that's simply the last time the Internal Earnings Code had a significant overhaul, so it's simply referred to as the Internal Earnings Code of 1986. The fundamental part here is those other code sections recommendation.

Let's begin with 280C(a) since that's the easy one. That is simply stating that if you get a credit on some wages you pay in your business, you can't double dip and take a reduction for those same incomes. Now let's talk about area 51(i)( 1 ), which states, "No incomes will be taken into account ...

with respect to an individual 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 an individual who owns, directly or straight, more than 50 percent in value of worth outstanding stock exceptional the corporation, or, if the taxpayer is an entity other than a corporation, to any individual who person, directly or indirectly, more than 50 percent of the capital and profits interests revenues the entity." So let's focus on the stipulation that says "if the taxpayer is a corporation" since we're presuming an S corp taxpayer here.Let's focus on the provision that states "if the taxpayer is a corporation" since we're assuming an S corp taxpayer here.That is simply saying that if you get a credit on some salaries you pay in your company, you can't double dip and take a reduction for those very same salaries. Let's focus on the clause that states "if the taxpayer is a corporation" because we're assuming an S corp taxpayer here.

So this is saying that you don't take into account wages with respect to an individual who owns, straight or indirectly, more than 50 percent in worth of the outstanding stock of the corporation. This is stating that you do not take into account incomes with regard to an individual who owns, straight or indirectly, more than 50 percent in value of the impressive stock of the corporation. That seems clear to me that owner earnings do not qualify. Now, some tax experts are looking at the employee retention credit qualified wages FAQs on the IRS website, and they're looking at FAQ 59, which says, "Are wages paid by an employer to staff members who are related individuals thought about certified incomes?

" and they're stating, "Look at the answer here. It's only these relatives whose salaries do not count. And the IRS didn't particularly state owner salaries or partner incomes don't count here, so bad-a-boo, bad-a-bing, therefore owner wages must count." To that, I would say, "Look. The IRS site is not the tax code. That appears clear to me that owner salaries do not qualify. It's only these relatives whose salaries don't count. The IRS website is not the tax code.