The line 21 net income or loss flows to personal return, last year would have been schedule 1, line 5 which is carried forward to line 7a of your 1040 and you pay tax on the distribution there. Then if the income is QBI you can deduct 20% of it on the 8995.
The IRS looks that your report at least some of this net income as wages, thus the need for a W-2. Even though you are paying yourself, you still need to file federal 941's for Social Security and Medicare at 15.3%. Most people make estimated payments for federal, and possibly state, as required. Then you don't have to "withhold" federal or state tax for the W-2, that is simplest. But issuing a W-2 means you then need to file a W-3 along with a copy of the W-2 you prepare for yourself. Pain in the @ss but a evil necessity as a sub-s corp. The IRS doesn't look kindly upon just paying tax on the distribution. They want their 941 money. But the wages and payroll taxes you incur serve to reduce the net income/distribution of the s corp. Unfortunately for this year the W-3 and W-2 copy are due by tomorrow February 1st, 2021.
Good luck and sorry for the late response.
