I think we need some clarification here:
- You indicate that "My S Corporation received a tax refund..."
- If that is the case, the entire refund is related to corporate overpayment.
- If the taxpayer had excess SS withheld in any given year, that would have been adjusted on their individual tax return.
- Based on the limited, and unclear facts, if the corporation received a refund check, made out to the corporation, that means the overpayment relates to the corporations portion of any SS taxes.
- So unless I am misunderstanding the facts, the excess SS paid by the corporation that was refunded is taxable income to the corporation. This is because the withholding taxes were taken as a deduction in prior year(s).
- Also, any interest income is taxable at the corporate level as well.
- Your question(s) and facts are mixing corporate and individual when it appears that only the S corporation received a refund. This needs to be clarified in order to provide a more accurate response.
- Also, please clarify how the refund came about. Did someone amend your corporate payroll taxes?
*A reminder that posts in a forum such as this do not constitute tax advice.
Also keep in mind the date of replies, as tax law changes.
