Discussion:S Corporation merged into new S Corporation

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Discussion Forum Index --> Advanced Tax Questions --> S Corporation merged into new S Corporation
Discussion Forum Index --> Tax Questions --> S Corporation merged into new S Corporation

Rgerloff (talk|edits) said:

9 January 2009
I have a client that on June 30, 2008 merged their S Corporation into a new S Corporation. The old Corporation no longer exists and all assets and liabilities were merged and transferred to the new corporation. The new corporation has a new federal id number. Certificate of Mergers were filed with the State Secretary of State and approved. Questions: Does the company file only 1 1120s at the end of the year under the new entities ID Number only? If so, what disclosurers do I need to attach so IRS knows that this includes the previous company? Does the company file only 1 set of W-2's for the entire year?

Thanks

Randy

ReadMyLips (talk|edits) said:

10 January 2009
I believe you need to file 1120s and W2s for both companies.

Harry Boscoe (talk|edits) said:

11 January 2009
IIRC there's a very straight-forward way that the survivor of the merger files only one set of W-2s which includes all the employees for both corporations for the whole year. Something about "successor employer" or some similar term that very simply but accurately describes the situation. It's got to be in the regs in the payroll tax area. Also, you'll find there may be a benefit built into this solution, cuz there's only one FICA limit to apply, if some of the employees end up having been employees of both corporations.

But it's not the "common paymaster" situation. It's something different, but the solution is comme il faut.

And don't forget the SUTA - state unemployment - complications when two employees merge. That one is gonna be more complicated.

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