Levittown NY Employee Retention Tax Credit And Ppp

 
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 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, however if I needed to lean one way or the other, I would lean in the direction of saying that owner salaries in so far as we're discussing somebody who owns more than 50 percent of business, do not certify.
  
 
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I do not desire to get too technical here, however Section 2301(e) of the CARES Act -- which created 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 Revenue Code of 1986 shall apply," don't get caught up on the 1986, that's just the last time the Internal Income Code had a major overhaul, so it's simply described as the Internal Revenue Code of 1986. The vital part here is those other code sections reference.

Let's begin with 280C(a) because that's the easy one. That is just stating that if you get a credit on some incomes you pay in your service, you can't double dip and take a deduction for those exact same salaries. Now let's discuss section 51(i)( 1 ), which states, "No wages shall be considered ...

with regard to an individual who bears any of the relationships explained 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 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, directly or indirectly, more than 50 percent of the capital and earnings interests in the entity." So let's focus on the stipulation that says "if the taxpayer is a corporation" since we're assuming an S corp taxpayer here.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.That is just stating 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 exact same earnings. Let's focus on the stipulation that says "if the taxpayer is a corporation" because we're presuming an S corp taxpayer here.

So 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. This is saying that you do not take into account incomes with regard to a person who owns, directly or indirectly, more than 50 percent in worth of the impressive stock of the corporation. That seems clear to me that owner incomes do not certify. Now, some tax specialists are looking at the employee retention credit certified wages FAQs on the IRS site, and they're looking at FAQ 59, which says, "Are wages paid by an employer to workers who are associated people thought about certified earnings?

" and they're saying, "Look at the answer here. It's only these loved ones whose earnings do not count. And the IRS didn't particularly say owner salaries or spouse wages 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 appears clear to me that owner incomes do not certify. It's just these relatives whose wages do not count. The IRS website is not the tax code.