Can wages earned by the spouse of an 100% S-Corp owner employee be part of Officer Comp on Line 7 of Form 1120S?

Forum|Forum|5 years ago
January 6, 2021
1 reply
17 views

An S-Corp Officer is both employee and 100% shareholder. With this logic, an S-Corp Officer's wife who indirectly owns 100% of shares also work for the Company, participating decision making with the husband, I wonder if it makes sense to report her wages as part of the "Officer Comp" on Line 7 of Form1120S? (Assume Married Filed Jointly)

ProConnect Tax

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Best answer by sjrcpa

While there is imputed stock ownership, there is not imputed officership.

sjrcpaAnswer

Level 15

While there is imputed stock ownership, there is not imputed officership.

The more I know the more I don’t know.

T

TaxesTechAuthor

Level 5

Thank you for responding. I also consulted my tax professor and he said the officer’s legality is actually not a tax issue, but is governed by the state law. As long as the wife is a legal officer under the state jurisdictions where the S-Corp is incorporated, she can report her salary as officer comp.

sjrcpa

Level 15

Correct. In your OP you never said she was an officer.

The more I know the more I don’t know.

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