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Enhearten_Finanancial
Level 1

Started payroll under Parent Company before forming an affiliate LLC - Can I just file and pay payroll from Affiliate?

Hello,

 

I have kind of a complex issue that mainly deals with payroll -- We have an ongoing Parent corporation who started an affiliate company - the parent company has no other employees.  The parent company started paying payroll for someone hired to only work for the affiliate company on 9/15/2020.  The business filing (EIN and state incorporation) for the affiliate company was not completed until 10/30/20.  

 

The owner made an equity payment to the Parent company to provide for operating expenses of the affiliate also on 9/01/2020.  I was hoping, for ease of filing, I could start filing payroll taxes only under the new affiliate, and not mess with setting up payroll filings for the Parent company, because there are no plans to have employees for the parent company.  Can I do that?  I would handle the equity deposit and affiliate expenses paid by the Parent (including payroll) as debits and credits to Equity of the Parent transfered to the afffiliate, and then record the actual expenses on the affiliate side....I just want to be sure that I am allowed to do that considering there is a timing difference in the actual business start date and hire/pay date of the affiliate employee.  

 

I should also include that the Parent company does not use Quickbooks software (use Macola Progression), but we are using QBO for the Affiliate company and I set the employee up on QBO back in September and have been "processing" payroll through there to get the total to pay from the Parent company.

1 Comment 1
john-pero
Community Champion

Started payroll under Parent Company before forming an affiliate LLC - Can I just file and pay payroll from Affiliate?

There is nothing wrong with any company starting to pay payroll before acquiring all tax ID numbers, which is or can be what you did. 

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