"Did not have distribution so did not have wage for sole shareholder and no employees"

Everyone is pointing out this is backwards. I hope that isn't one of the statements you are arming yourself with for purposes of guiding clients.

Or, you are explaining that the person took no money, so that also means no paychecks? Because distributions are never payroll and not in lieu of payroll. Payroll is primary. Having a paper loss would not preclude payroll, either.

Because Yes, there is an employee. Your Shareholder is the employee, if they are doing the work of the business.