Ozone Park NY Employee Retention Tax Credit 2022

 
Can you take the employee retention credit on the wages paid of your S corporation to you, the 100% owner? Now, this is a huge dispute in the tax professional community right now. I'm not going to hang my hat on any one position up until we get more information 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 earnings in so far as we're discussing somebody who owns more than 50 percent of the company, do not qualify.
  
 
How It Works
I don't wish to get too technical here, but Area 2301(e) of the CARES Act -- which developed the employee retention credit -- states that for purposes of the employee retention credit, "rules similar to the rule of sections 51(i)( 1) and 280C(a) of the Internal Profits Code of 1986 shall use," don't get captured up on the 1986, that's just the last time the Internal Earnings Code had a major overhaul, so it's just referred to as the Internal Earnings Code of 1986. The fundamental part here is those other code sections recommendation.

Let's start with 280C(a) since that's the simple one. That is simply saying 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 very same earnings. Today let's speak about section 51(i)( 1 ), which says, "No wages will be considered ...

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 indirectly, more than 50 percent in worth of the outstanding stock of the corporation, or, if the taxpayer is an entity aside from a corporation, to any person who owns, directly or indirectly, more than 50 percent of the capital and profits interests in the entity." So let's concentrate on the clause that states "if the taxpayer is a corporation" since 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 presuming an S corp taxpayer here.That is just stating 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. Let's focus on the provision that says "if the taxpayer is a corporation" due to the fact that 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, straight or indirectly, more than 50 percent in worth of the impressive stock of the corporation. This is stating that you do not take into account wages with regard to an individual who owns, directly or indirectly, more than 50 percent in worth of the impressive stock of the corporation. That appears clear to me that owner salaries do not qualify. Now, some tax specialists are looking at the employee retention credit qualified wages FAQs on the IRS website, and they're looking at FAQ 59, which states, "Are incomes paid by an employer to staff members who relate individuals thought about certified earnings?

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