turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
Announcements
Close icon
Do you have a TurboTax Online account?

We'll help you get started or pick up where you left off.

troy1
Returning Member

Worker's Compensation - Deductible to S-Corp?

If an S-Corp pays worker's compensation for its employees, is this  expense deductible?

Connect with an expert
x
Do you have an Intuit account?

Do you have an Intuit account?

You'll need to sign in or create an account to connect with an expert.

7 Replies
Anonymous
Not applicable

Worker's Compensation - Deductible to S-Corp?

workers compensation or premiums for workers comp insurance (deductible).   most states require companies to carry w/c insurance on employees unless company gets approval by state to be self-insured.  in such case, w/c payments would be deductible. now if state requires a business to carry w/c ins but it doesn't and has to pay w/c settlement , then to be deductible under IRC 162 the payment would have to be ordinary and necessary.    This might not be the case if the company is violating the law by not carrying required W/c  insurance.   

Carl
Level 15

Worker's Compensation - Deductible to S-Corp?

That's all taken care of for you on the IRS Form 940 which is usually filed separate from the 1120-S. The unemployment compensation paid by the S-Corp is generally referred to as the "U.C. Tax" and is included in the amount on line 12 of the 1120-S.

 

troy1
Returning Member

Worker's Compensation - Deductible to S-Corp?

I thought 940 was unemployment insurance (not worker's compensation)?

Worker's Compensation - Deductible to S-Corp?

If you are doing payroll for your employees then you need to either use a payroll company so you get all the forms correct OR get educated on the federal & state requirements :

https://www.fundera.com/blog/payroll-taxes

Worker's Compensation - Deductible to S-Corp?


@troy1 wrote:

I thought 940 was unemployment insurance (not worker's compensation)?


It is - Form 940 is used to report your annual Federal Unemployment Tax Act (FUTA) tax. 

Anonymous
Not applicable

Worker's Compensation - Deductible to S-Corp?

the question is about workmen's compensation not unemployment compensation taxes

Worker's Compensation - Deductible to S-Corp?

Workman's comp is a deductible payroll expense to the employer.
message box icon

Get more help

Ask questions and learn more about your taxes and finances.

Post your Question
Manage cookies