Tax Law (Questions About Taxes)/unemployment

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QUESTION: Can an owner of a sub s corporation  (owns 50%) He is an employee, pays into unemployment tax. His business has no work  because of winter and has no work coming in.  He has not sold or dissolved  his business. Can he collect unemployment?   Thanks for your time in answering this question

ANSWER: Tom:

If it is an S Corporation can the Officer of the Corporation lay himself off.  In Tennessee the answer would be NO.  The Officer would be entitled to unemployment if he became unemployed thru no action on the Officers part.

John

---------- FOLLOW-UP ----------

QUESTION: If the Officer became unemployed because there was no work, would that not be considered being unemployed through no action on the Officers part???

Thanks for answering this follow up question.........

Answer
Tom:

How can an officer of a corporation become unemployed?  An officer of a corporation may not pay himself because there are no funds but no pay is not the same thing as not having a job.  A great number of people do not understand the concept of a corporation.  A corporation can not exist without a stockholder and an officer.  An officer is always an employee of the corporation.  As an officer you are doing paper work, bidding on jobs for the corporation.  You are working but you are not getting paid.  If you are working you can not be unemployed.

John

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John L. Tidwell

Expertise

Unemployment tax law both state and federal; determination of employer employee relationship; the usual 20 commonlaw factors for making that determination; and what makes me a liable employer.

Experience

Over 20 years of field audit experience with a state agency

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none

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Education/Credentials
Degree in Accounting from Falls Business College

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