Hello,
I had a S-Corporation. I am the owner and the one running it.
It is a small business start recently and so not enough profit to pay for any employee (only enough to continue the business funding etc...), so I am the owner but not an employee and not take any money out from company yet (no divdends etc).
It seem it is okay when I filed for Tax 2019/2020.
But I looked up somewhere in TurboTax while filing for my 2020 taxes (sorry miss where it was located, but I think relate to CA Form 3554), Turbo Tax mentioned start from 2021, S-Corporation must filed for New Employment and that amount and benefit must be "suitable" for the work.
I deleted the Form 3554 from my 2020 Tax to finish the filing.
However, as the business was just started (and last year was even a loss), so will not able to pay for employee (even myself) a "suitable amount" (even the minimum wage required in CA) .
But after searching to IRS/other forms, I did not see any direct law/tax indicated that S-Corporation must have at least one employee.
I am willing to pay the additional income tax. For 2020, the TurboTax Business 2020 just directly place the aggregate gross receipt from the gross income of business. Even though business revenue is at loss due to spending vs sales) (not sure if that is what pass-through mean? As this was not the case when I filed 2019 tax with Turbotax Business 2019.
But I just want to confirm is it still legal to have 0 employee as of 2021 in California for S-Corporation?
