In re Regan & Regan, P. C.

Mikoll, J. P. Appeal from a decision of the Unemployment Insurance Appeal Board, filed July 30, 1997, which assessed Regan & Regan, [830] P. C. for additional unemployment insurance contributions based upon the earnings of its corporate officers for the audit period from July 1, 1992 through December 31, 1994. Regan & Regan, P. C. (hereinafter R & R) is a professional service corporation engaged in the practice of law. For Federal income tax purposes, it is a subchapter S corporation, closely held by two shareholders who are partners in the law firm. One shareholder serves as the corporation’s president while the other serves as its corporate secretary. In these roles, both individuals performed corporate administrative duties for which they were compensated during the period in question by the payment of equal shares of the corporation’s net profits. This appeal arises out of the Unemployment Insurance Appeal Board’s ruling that R & R was liable for unemployment insurance contributions for the period in question based upon the remuneration paid to its corporate officers. Although R & R contends that its corporate officers were not engaged in “employment” within the meaning of Labor Law § 511 (1) (a), it is well settled that a corporation is liable for the payment of unemployment insurance contributions based upon remuneration paid to individuals who perform the duties of corporate officers (see, Matter of Ellenbogen Computer Servs. [Hudacs], 202 AD2d 825; Matter of Preferred Computer Trading Corp. [Hartnett], 173 AD2d 1031; Matter of Salamanca Nursing Home [Roberts], 117 AD2d 903, affd 68 NY2d 901). These payments are, in turn, deductible from the corporation’s gross income as business expenses (see, 26 USC § 162 [a]). Substantial evidence supports the decision of the Board which is, accordingly, affirmed. Mercure, White, Yesawich Jr. and Peters, JJ., concur. Ordered that the decision is affirmed, without costs.