Discussion Archives:Employer social security tax credit carryforward

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Discussion Forum Index --> Advanced Tax Questions --> Employer social security tax credit carryforward

Discussion Forum Index --> Tax Questions --> Employer social security tax credit carryforward

Taxstick (talk|edits) said:

19 February 2012
I am interested in your thoughts on a businees tax credit carryforward.

Reviewing prior years tax return of a new tax client (and preparing the personal return) reflects a carryforward of the employer social security credit..from a few years ago it appears. Client has tax this year and can use some of the credit...but after asking about this credit (and the related business) I discover that the restaurant went out of business..owing creditors and some payroll taxes to Fed.

I know tax attributes are reduced in COD issues and bankruptcy, including loss carrys and credit carrys. But I am wondering if this credit would be permitted in this case. Its not a basis issue...because these credits can be used regardless. I just get the feeling that these credits are attached to those payroll taxes...and if the IRS never collected from the officer/shareholders (one of which is my client) or from the s-corp...then I kinda wonder if this tax credit carry is valid. And of course..whether this tax return should reflect this carry (and use).

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