Unemployment insurance wages | Qualified 1st-Year wages | Qualified 2d-year wages | |
Corporation: | |||
M | $600,000 | $184,000 | $75,000 |
N | 300,000 | 85,000 | 90,000 |
O | 360,000 | 120,000 | 115,000 |
P | 24,000 | 24,000 | 0 |
Total | 1,284,000 | 413,000 | 280,000 |
Each corporation's share of the credit attributable to qualified second-year wages is computed as follows:
Assume the facts in example 1 with these additional facts. A, a member of a targeted group, worked for more than one of the members of the controlled group in the taxable year. A first began work for Corporation M on January 1, 1980, and later worked for Corporations N and O during 1980. For services rendered by A during 1980, the following wages were paid to A: Corporation M paid A $2,500 of qualified first-year wages: Corporation N paid A $1,500 of qualified first-year wages; Corporation O paid A $3,000 of qualified first-year wages. Corporations M, N, and O paid A a total of $7,000 of wages during 1980. Only $6,000 of qualified first-year wages per year per employee may be taken into account for purposes of the credit. See § 1.51-1(d)(1) . Since Corporations M, N, and O are treated as a single employer under section 52(a), the maximum $6,000 of qualified first-year wages paid A by the group must be apportioned among Corporations M, N, and O as follows:
Unemployment insurance wages, 1979 | Qualified wages paid from July 1, 1979, to June 30, 1980 | ||
1st year wages | 2d year wages | ||
Corporation: | |||
Q | $500,000 | $150,000 | $80,000 |
R | 300,000 | 110,000 | 50,000 |
S | 100,000 | 25,000 | 10,000 |
Total | 900,000 | 285,000 | 140,000 |
Corporation R's share of the credit attributable to qualified second-year wages is $12,500
Corporation R's share of the credit for its 1979-1980 taxable year is $64,605.26 ($52,105.26 + $12,500).
Example.
1976 | 1977 | Increase in FUTA wages in 1977 over 1976 | |
Corporation. | |||
T | $1,000,000 | $1,015,000 | + $15,000 |
U | 500,000 | 650,000 | + 150,000 |
V | 600,000 | 580,000 | -20,000 |
W | 40,000 | 100,000 | + 60,000 |
Total | 2,140,000 | 2,345,000 | 205,000 |
The five or fewer persons whose ownership is considered for purposes of the controlling interest requirement for each organization must be the same persons whose ownership is considered for purposes of the effective control requirement.
such organization (whether or not a corporation) nevertheless will be treated as a member of such old group if all the organizations (whether or not corporations) that are members of the old group meet all the requirements of § 1.1563-1(d)(3) with respect to such taxable year.
26 C.F.R. §1.52-1
Secs. 44B, 381, and 7805 of the Internal Revenue Code of 1954 (92 Stat. 2834, 26 U.S.C. 44B ); 91 Stat. 148, 26 U.S.C. 381(c)(26) ; 68A Stat. 917, 26 U.S.C. 7805