Level 3

Solved

The client is in the service business and do not need to pay State Sales Tax, and doesn't have State Tax ID, How can I bypass State ID In Proconnect ?

Forum|Forum|4 years ago
March 15, 2022
2 replies
10 views

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ProConnect Tax

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Best answer by qbteachmt

This is not correct: "No Payroll"

S Corp is required to have payroll. Any shareholder who also works for that Corporation in its business is an Employee. The IRS specifically looks for that error and the entity runs the risk that all takings by this person will be recharacterized as Payroll, and they will be late with payroll, incurring penalty and interest, because this scenario is called "trying to avoid payroll taxes" and is not legal.

You have a bigger problem, my friend.

T

TaxGuyBill

Level 15

Where is it asking for the State ID? Is this a Corporation or Partnership that needs to file a state return?

The more details you can provide about the situation and what the program is saying, the more likely somebody can help you.

B

Bob62Author

Level 3

It is in critical diagnosis to enter State tax ID, the client has S Corp and needs to file 1120-s

T

TaxGuyBill

Level 15

Is it filing a State return as well? I don't know about your state, but my state requires a corporation to have a state EIN in order to file a state corporate return.

qbteachmt

Level 15

Sales tax is only one thing they might be subject to; you would also have Payroll for the State, so they are a registered employer in that State and would have been issued whatever is issued. Perhaps they just didn't recognize this is what is being asked for.

Don't yell at us; we're volunteers

B

Bob62Author

Level 3

No Payroll or Sales Tax, His total Service Income is less than 20K NOI is less than 2K

I think I have checked the wrong box In the software finally I entered max eight-digit and e-file

got accepted both FED and State.

Thanks for the reply I really appreciate it.

Thanks

qbteachmtAnswer

Level 15

This is not correct: "No Payroll"

S Corp is required to have payroll. Any shareholder who also works for that Corporation in its business is an Employee. The IRS specifically looks for that error and the entity runs the risk that all takings by this person will be recharacterized as Payroll, and they will be late with payroll, incurring penalty and interest, because this scenario is called "trying to avoid payroll taxes" and is not legal.

You have a bigger problem, my friend.

Don't yell at us; we're volunteers

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