You can generally deduct the pay you give your employees for the
services they perform for your business. The pay may be in cash,
property, or services. It may include wages, salaries, vacation
allowances, bonuses, commissions, and fringe benefits. This chapter
provides information about deductions allowed for various kinds of
pay.
For information about determining who is an employee and about
employment taxes on your employees' pay, see Publication 15,
Circular E, Employer's Tax Guide, Publication 15-A,
Employer's Supplemental Tax Guide, and Publication 15-B, Employer's Tax Guide to Fringe Benefits. For
information about deducting employment taxes paid on your employees'
pay, see chapter 6.
You can claim the following employment credits if you hire
individuals who meet certain requirements.
- Empowerment zone employment credit.
- Indian employment credit.
- Welfare-to-work credit.
- Work opportunity credit.
However, you must reduce your deduction for employee wages by
the amount of any employment credits you claim. For more information
about these credits, see Publication 954,
Tax Incentives for
Empowerment Zones and Other Distressed Communities.
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