Bronx, NY asked in Tax Law for New York

Q: Can an owner of a small no income S corp, who does not receive a paycheck, get UI from other W-2 full time employer?

If an S Corp has been non-profitable, and officer had to work full time as employee with W-2 at same time for companies in Manhattan since they were on payroll, would they get UI?

Seems way things are worded on DOL, that if you are an officer of a corporation, you are still considered employed even if there is no income or pay from that corporation. I hope to God that if this is true that some leniency will be allowed under the current circumstances because that is hard on people who just left it open for possible future business, but don't have it as a source of any income.

And second, if not, would they qualify for the PUA because they didn't make any income through their corp to report as a loss of income? Seems you have to fall under self-employed or independent contractor with proof of income. So seems neither fits. Thanks.

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2 Lawyer Answers

A: Your S-corp won't stop you form being eligible under a different employer so long as you don't have income.

You also are not eligible for UI form an S-corp if you had not W2 wages. An S-corp distribution is not SE or IC income for UI or PPP purposes. You have to have paid employment or self-employment tax on the amounts.

Jonathan David Warner agrees with this answer

Jonathan David Warner
Jonathan David Warner
Answered
  • Tax Law Lawyer
  • Albany, NY
  • Licensed in New York

A: You may be eligible for PUA, but I am not sure about UI. Your best bet would be to apply online, as I have a feeling that this is a fairly common issue that can be straightforwardly resolved through the application process.

Good luck with your case!

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