New Rochelle NY Employee Retention Ertc Filing

 
Can you take the employee retention credit on the earnings 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 until we get more explanation from the IRS on this, however if I needed to lean one method or the other, I would lean in the direction of saying that owner incomes in so far as we're talking about somebody who owns more than 50 percent of business, do not qualify.
  
 
Just how It Functions
I do not desire to get too technical here, however Area 2301(e) of the CARES Act -- which produced the employee retention credit -- states that for purposes of the employee retention credit, "guidelines comparable to the rule of areas 51(i)( 1) and 280C(a) of the Internal Revenue Code of 1986 shall use," do not get captured up on the 1986, that's simply the last time the Internal Profits Code had a major overhaul, so it's just referred to as the Internal Earnings Code of 1986. The important part here is those other code sections referral.

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

with respect to an individual who bears any of the relationships explained in subparagraphs (A) through (G) of area 152(d)( 2) to the taxpayer, or, if the taxpayer is a corporation, to an individual who owns, straight or indirectly, more than 50 percent in value of the outstanding stock of the corporation, or, if the taxpayer is an entity besides a corporation, to any individual who owns, straight or indirectly, more than 50 percent of the capital and earnings 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 assuming an S corp taxpayer here.Let's focus on the clause that states "if the taxpayer is a corporation" because we're presuming an S corp taxpayer here.That is simply saying that if you get a credit on some salaries you pay in your business, you can't double dip and take a deduction for those same wages. Let's focus on the stipulation that states "if the taxpayer is a corporation" because we're assuming an S corp taxpayer here.

So this is saying that you do not consider incomes with regard to a person who owns, straight 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 incomes with regard to an individual who owns, straight or indirectly, more than 50 percent in worth of the exceptional stock of the corporation. That seems clear to me that owner earnings do not certify. Now, some tax specialists are taking a look at the employee retention credit certified incomes FAQs on the IRS website, and they're looking at FAQ 59, which says, "Are wages paid by a company to workers who are related individuals considered certified salaries?

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