I received this question from one of our readers today:
I have a client that is the owner of an S-Corp. He elected not to pay SUTA for his wages and I don’t know how to correctly fill out the 940 form. We didn’t pay any SUTA late but it is still calculating like we did using the other employees’ wages(I use QuickBooks). Any advice or direction would be GREATLY appreciated.
Great question! From what you have said, I’m assuming that the owner made the election not to pay SUTA for his wages because it is allowed by the state the he lives in. For federal tax purposes, a minimum of 6% of wages must be paid either to the state or to the federal government on ALL wages. Therefore, the form 940 most likely is calculating 6% on the portion of wages that you did not pay SUTA on.
My advice to you is to consult a tax professional that can take a look at the return to ensure that you are correctly reporting the wages that you did not pay SUTA for on the Form 940.
Here is a resource that will provide you with more information about wage compensation for s-corp officers: https://www.irs.gov/uac/wage-compensation-for-s-corporation-officers
Thank you for reading!
All the Best-
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