June 26, 2024
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S Corp vs. Social Security: Protecting Your Child’s Disability Benefits
By The Admiral StaffThe article explores the implications of electing S Corp tax status for LLCs, specifically concerning the Disabled Adult Child (DAC) benefit from Social Security. While S Corp status can reduce FICA taxes by allowing owners to take distributions instead of a salary, this reduction can negatively impact a child’s future DAC benefits, which are based on the parent’s Primary Insurance Amount (PIA). The DAC benefit can provide significantly more financial support than SSI and offers advantages like fewer asset restrictions and potential access to Medicare.
