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Employee Retention Credit & Owners


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Has anyone seen confirmation that owners are eligible for ERC?  A bunch of my S-Corps are single owner corps and I haven't seen any guidance from the IRS that owners are definitely eligible.  Only that relatives of owners are not.  As I'm filing Q1 941s (and looking over 2020's previously filed 941s that were PPP borrowers) it's a lot of potential money for most of them.  

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Copied from the IRS FAQs:

"59. Are wages paid by an employer to employees who are related individuals considered qualified wages?

No. Wages paid to related individuals, as defined by section 51(i)(1) of the Internal Revenue Code (the "Code"), are not taken into account for purposes of the Employee Retention Credit. A related individual is any employee who has of any of the following relationships to the employee's employer who is an individual:

A child or a descendant of a child;

A brother, sister, stepbrother, or stepsister;

The father or mother, or an ancestor of either;

A stepfather or stepmother;

A niece or nephew;

An aunt or uncle;

A son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law.

In addition, if the Eligible Employer is a corporation, then a related individual is any person that bears a relationship described above with an individual owning, directly or indirectly, more than 50 percent in value of the outstanding stock of the corporation.

If the Eligible Employer is an entity other than a corporation, then a related individual is any person that bears a relationship described above with an individual owning, directly or indirectly, more than 50 percent of the capital and profits interests in the entity.

If the Eligible Employer is an estate or trust, then a related individual includes a grantor, beneficiary, or fiduciary of the estate or trust, or any person that bears a relationship described above with an individual who is a grantor, beneficiary, or fiduciary of the estate or true."

 

If related  individuals do not qualify, I think we should assume that owners don't qualify.

In addition,  if you look deeper into the FAQs regarding what constitutes qualifying wages and what doesn't,

I really don't see how wages paid to an owner would meet the definition of qualifying wages.

would ever qualify.

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OK, so NOT the owner? And, NOT his/her kids. But spouse is not mentioned in the above list. So, the spouse's wages DO qualify? The only family member who does qualify? Even if spouse owns 5% of the company, right?

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5 minutes ago, Lion EA said:

OK, so NOT the owner? And, NOT his/her kids. But spouse is not mentioned in the above list. So, the spouse's wages DO qualify? The only family member who does qualify? Even if spouse owns 5% of the company, right?

I really don't think so. That wouldn't pass the smell test! As rushed and swamped as the IRS has been, we have all seen details repeatedly omitted, reversed,

confused, or . . . . . . . . .!  Just because a spouse isn't on that list, it's still fairly clear who doesn't qualify. In addition, if you look at the FAQs regarding what

constitutes qualifying wages, I don't see how a spouse jumps thorough those hoops.

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