Paying owner or shareholder distributions are payments of corporate earnings and not taxed as regular income through payroll.
To pay a distribution to an owner or shareholder you can set up a non-taxable money type, and apply the amount of the distribution in payroll, but the owner/shareholder will not have taxes deducted or receive a W-2 at year-end.
Please note: this is not the same as paying S-corp reasonable compensation through payroll. As an S-corp owner who is paying reasonable compensation-- a market-rate salary based on your specific duties, training, and experience-- paying W-2 wages would be run normally through payroll with taxable wages and taxes withheld. See the IRS information for more details.
Patriot cannot tell you what your reasonable compensation W-2 wages should be. Please seek a tax advisor or accountant.
For further info, see the IRS page Paying Yourself from the IRS website.
