New Rochelle 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 argument in the tax professional 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, but if I needed to lean one method or the other, I would lean in the direction of stating that owner incomes in so far as we're talking about someone who owns more than 50 percent of business, do not qualify.
  
 
Just how It Works
I do not wish to get too technical here, but Section 2301(e) of the CARES Act -- which produced the employee retention credit -- says that for purposes of the employee retention credit, "guidelines similar to the guideline of sections 51(i)( 1) and 280C(a) of the Internal Profits 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 significant overhaul, so it's just referred to as the Internal Income Code of 1986. The crucial part here is those other code areas referral.

Because that's the easy one, let's begin with 280C(a). That is simply saying 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 exact same wages. Now let's discuss area 51(i)( 1 ), which states, "No incomes will 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 a person who owns, straight or indirectly, more than 50 percent in value of the exceptional stock of the corporation, or, if the taxpayer is an entity besides a corporation, to any person who owns, straight or indirectly, more than 50 percent of the capital and profits interests in the entity." So let's concentrate on the stipulation that says "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" due to the fact that we're assuming an S corp taxpayer here.That is simply saying 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 exact same incomes. Let's focus on the stipulation that states "if the taxpayer is a corporation" since we're presuming an S corp taxpayer here.

So this is saying that you do not consider wages with respect to a person who owns, directly or indirectly, more than 50 percent in value of the impressive 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 value of the exceptional stock of the corporation. That appears clear to me that owner incomes do not qualify. Now, some tax professionals are looking at the employee retention credit certified incomes FAQs on the IRS site, and they're taking a look at FAQ 59, which states, "Are earnings paid by an employer to workers who belong people thought about certified incomes?

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