This article discusses who qualifies to take the credit, how to make the election, the calculation and allocation of the credit, and how to report it.
Reporting & Filing Requirements
An S corporation shareholder cannot unilaterally change an S corporation’s tax election in order to claim FICA tip credits.
Chief Counsel Advice was issued regarding who is ultimately liable for payment of employment taxes when using a professional employment organization.
Clients who wish to have income from services be treated as income of their corporations should have revise independent contractor agreements so that payments are made to their corporations.
Income earned by financial adviser was his, not the income of his wholly owned S corporation, and was therefore subject to self-employment tax.
Temporary and proposed regulations extend the religious and family member FICA and FUTA tax exceptions to disregarded entities.
The IRS issued final regulations clarifying the treatment of disregarded entities with respect to employment and certain excise taxes.
Editor: Kevin F. Reilly, J.D., CPA The IRS has issued final regulations that treat qualified subchapter S subsidiaries (QSubs) and other disregarded entities (DEs) as separate entities for federal employment tax and certain excise tax purposes (TD 9356). Although the regulations are effective as of August 16, 2007, the employment