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Self Employed, Paying Myself

I own 100% of my S-corp in the state of NY. I am the only person working in the business (no other employees) and I'm the only officer (no other officer)

I would like to start taking a salary from my own business.

Do I need to 1) purchase or have Worker comp insurance? 2) purchase or have disability insurance?

I think that the answer is no to both because I am the sole proprietor of the business entity. Just want to post and see what the consensus is?

corie

Comments

  • Our consensus will not help you - you have to follow state law - and you are NOT a sole proprietor - you are an employee of the corporation in which you are the sole shareholder - you are NOT self-employed - the corp (yes, even an S-Corp) is a separate legal entity and the Corp is the employer and you are the employee.

    Corporate officers are employees for unemployment tax purposes - The fly in the ointment is that as the sole corporate officer, you may not ever become "fully unemployed" for purposes of collecting benefits - on the otherhand, once your account is built up enough, your tax rate will be very low or even drop to zero. The corp becomes subject to the tax once it has paid $300 or more in compensation during a quarter. See these pages -
    https://www.labor.ny.gov/ui/employer.shtm
    https://www.labor.ny.gov/ui/dande/covered1.shtm
    https://www.labor.ny.gov/ui/claimantinfo/ui and corporate officers.shtm

    The following link is to a document that covers both work comp and disability insurance coverage requirements for NY - Looks like you will also have to get disability insurance for yourself
    http://www.wcb.ny.gov/content/main/forms/oc923.pdf

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