Discussion:Opting out of S-Corp to be eligible for Unemployment
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Discussion Forum Index --> Tax Questions --> Opting out of S-Corp to be eligible for Unemployment
| 10 July 2009 | |
| Client is 50% owner of S-Corp with her husband. A locksmith service. Her husband is the business, she does the admin.
Wife has another full time job and with the economy the way it is, she is concerned about losing her job. She now wants to relinquish her shares in the S-Corp and to stop taking the small paycheck she has been receiving. Total wages for her last year from the S-Corp was approx $8,000. Her full time job pays about $35,000 and while she doesn't expect to lose it, she is concerned that if she does lose that job, she wouldn't be eligible for Unemployment because of the S-Corp ownership. We are going to start the process of having her ownership in the S-Corp removed, just wondering what others thoughts are on this subject <last part submitted for Crow as he is apt to just speak on tangential issues>. Looking for best options and/or pitfalls of doing this. Thanks | |
| July 10, 2009 | |
| Is the marriage solid? By giving up the wife's 50%, does that put her at a disadvantage financially? | |
| 11 July 2009 | |
| Married for 20 plus years. I think they are pretty solid. And in a divorce, she'd still get half the business anyhow.
And no, no disadvantage financially. | |
| 30 July 2009 | |
| She just can't give up the shares. The change in ownership would have to be recorded with the secy of state.
It happened to me. My husband had an s corp. He had listed me as an officer of the corp. There was no question that I did not own any stock. I had a full time position with an acctg firm. When I was laid off, they found my name as a corp officer of my husband's business and my benefits were denied. | |
| 31 July 2009 | |
| Barb, thanks. We will be doing the relinquishing of shares sometime in august. | |
| 31 July 2009 | |
| You should also visit the state Department of Labor unemployment insurance web site to see what they say about under-employment and ownership interests in small businesses. | |
| 1 August 2009 | |
| Not worried about that. it's a locksmith business. He does all the field work and takes a decent salary.
She has a full time job working someplace else. Her salary out of the corp was minimum for the bookkeeping that she would do. | |
