why does my s corp pay into unemployment if I cannot collect it?
flashpt6 asked:
I own a S Corp in NJ and am told I am subject to Unemployment Inusrance contributions. Why does my business have to pay these taxes if I, being the only employee, cannot collect them if my business tanks?
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I own a S Corp in NJ and am told I am subject to Unemployment Inusrance contributions. Why does my business have to pay these taxes if I, being the only employee, cannot collect them if my business tanks?
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Because the law says so.
One could arguably say that I should not be required to support my local schools but when I pay my real estate taxes, approximately 2/3rd of these taxes go to support the public schools in my taxing district. Why do I have to pay for these schools when I do not, or cannot take advantage of them? The answer is, because I am a member of society and the powers that be dictate that I must do so. The same applies to unemployment taxes or any other tax for that matter.
You can collect it but the requirements are more stringent than for ordinary worker bees otherwise corporation owners would just lay themselves off during slack times.
Paying tax on your salary while not collecting benefits will ultimately translate into a better experience rate and reduce your ongoing state tax rate over the long haul.