Does my business have to pay the business portion (7.65%) of FICA taxes on year end profit sharing contributions that are deposited directly into employees 401k plans?

[dkonruff]

We are a subchapter S Corp with only one employee and a safe harbor plan.

[dmertz · Accepted solution]

No.  Profit-sharing contributions are employer contributions, not part of employee compensation.  Employer profit-sharing contributions are included nowhere on the employee's W-2.

[dmertz]

You said "we" are an S corp, implying that the S corp has more than one employee.  Shareholders are also employees if the shareholders provide any services to the S corp and must be paid reasonable wages reported on a W-2 .

[dkonruff]

Thanks for the answers.  I understand that the profit sharing contribution does not show up on the employees W-2.  My question relates to the employers portion of the SS and Medicare taxes.  As an employer do I have to pay in the employer portion... 7.65%.  I know that there is no withholding from the employee.

[dmertz]

That's the question I answered when I said "No."  I then explained that the answer is No because the profit-sharing contribution is not part of the employee's compensation.

[dkonruff]

Thank you.  I thought the question was misinterpreted.  Thank you so much for your help!!!