Section Rev 2402.01 - Compensation Element(a) The following shall be included in the compensation element: (1) Wages subject to federal income tax withholding included on an employee's federal Form W-2, Wage and Tax Statement;(2) Compensation specifically exempt from federal withholding such as, but not limited to, contributions by the employer on behalf of employees to: a. Qualified pension, profit-sharing and stock bonus plans under IRC section 401; orb. Annuity or deferred-payment plans under IRC sections 403 and 404;(3) Fringe benefits provided to, and included in the gross income of employees for federal income tax purposes, unless such benefits are excluded under (a)(2) above, or are included in gross income solely because the recipient is a partner or shareholder of an "S" corporation;(4) Imputed interest on a below-market rate loan between an employer and employee to which IRC section 7872 applies;(5) The amount taken as a deduction for the personal services of a proprietor, partner, or member for business profits tax purposes;(6) The net earnings from self employment, not including: a. The individual's distributive share from a trade or business conducted by another business enterprise;b. The amount included under (a)(5), above; orc. Net losses from self-employment;(7) The amount reported as guaranteed payments to partners on the partnership's federal income tax return if such amount has not been included under (a)(5) or (6), above;(8) Wages paid to statutory employees, in accordance with IRC section 3121(d) (3) who file federal Form Schedule C and do not have an employer-employee relationship;(9) Wages paid to an employee for qualified research and development services reported as a credit and not deducted as an expense by the business enterprise under IRC section 41; and(10) Wages paid, under RSA 277-B:9, I(a), by an employee leasing company to its leased employees in accordance with Rev 2402.08.(b) Payments in the form of, or for, services identified in IRC section 3401(a) (1), (9), (10), (13), (14), (15), (16), (18), (19), or (20) shall not be considered compensation for purposes of the compensation element or apportionment. (c) Compensation paid or accrued for an employee, employed by an affiliated group of business enterprises and performing services for multiple members, shall be included in the compensation element of the entity which: (1) Is subject to tax in New Hampshire; or(2) Deducts the individual's compensation for federal income tax purposes provided that: a. The compensation amount is not included within a management fee charged to the affiliate;b. The enterprise issuing the individual's federal Form W-2, "Wage and Tax Statement," charges the affiliate for the actual payroll expenditures; andc. All affiliated enterprises maintain detailed records to substantiate the amount of compensation paid or accrued for each employee and how such compensation was recorded and deducted by the various affiliates.N.H. Admin. Code § Rev 2402.01
INTERIM #5708, eff 9-23-93, EXPIRED: 1-21-94; ss by #5774, eff 1-21-94; ss by #7178, eff 12-23-99, EXPIRED: 12-23-07
New. #9065, eff 1-10-08
Amended by Volume XXXVI Number 06, Filed February 11, 2016, Proposed by #11032, Effective 1/29/2016, Expires 1/29/2026.Amended by Volume XXXVI Number 10, Filed March 10, 2016, Proposed by #11045, Effective 2/24/2016, Expires 2/24/2026.Amended by Volume XXXIX Number 46, November 14, 2019, Proposed by #12906, Effective 10/23/2019, Expires 10/23/2029.