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Owner Employee Wages – Do They Qualify For ERC?
Question: I read the recent IRS Notice, but I’m not sure I understand whether or not an employee/owner’s wages qualify for the ERC. Help! Answer: On August 4, 2021, the IRS released Notice 2021-49 to answer exactly this question – albeit true-to-form in the confusing way only the IRS offers as an explanation. The notice addresses full-time equivalents, how to stack the ERC with tip credits, the timing of adding back wages for tax purposes, and whether a majority owner’s wages qualify for ERC. Is it possible the IRS is favoring orphans in this notice? It certainly appears that way. The original text of the CARES Act referenced the rules for Work Opportunity Credits. Specifically, the act indicates that relationships listed in Code Section 51 apply and, while not explicitly saying only payments made to the list of related parties were ineligible, most readers assumed wages to the owners were not disqualified. Here’s what the guidance now says.
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CURRENT EDITION
Leaving the United States, Part III: Dual Citizenship
In Part I of this three-part series, we discussed the implications and taxes for American expatriates. In Part II we turned our attention to renouncing citizenship. Here in Part III, we will consider the halfway point of dual citizenship. And as you would expect, taxes are a serious consideration.
Reflecting On Rothing
I have been dissatisfied with most of the articles that I have read about what I call Rothing, i.e. foregoing a deduction for retirement savings with the prospect of tax-free distributions in the future or taking the tax hit on a deferred account to convert it to a tax-free account. The articles generally have a pro-Roth bias. Suze Orman, for example, swears by Roths. They also tend to not have numbers in them. What I am going to do here is to reflect on the idea of Rothing and discuss what I see as some key numbers. I’m not going to dive deep into technical issues.
Considering a Historic Building for Your Business? These Tax Credits are Good News
Historic buildings make a beautiful location for doing business. Unfortunately, many of them may seem out of the price range of small business owners. But, that’s not necessarily the case. The state and federal governments have an interest in preserving these properties, and they are willing to give you tax credits for buying and restoring a historic building. The credits reimburse a large proportion of your restoration costs. This really is a great incentive to go for a building that will give your company a unique and professional feel.
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