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Entities

Question: Are partners considered employees of a partnership or are they considered self-employed?

Answer:

Partners in a partnership (including members of a limited liability company (LLC)) are considered to be self-employed, not employees, when performing services for the partnership.

  • If you are a general partner of a partnership (or treated as a general partner in an LLC) that carries on a trade or business, your net earnings from self-employment include your distributive share of the income or loss from that trade or business. General partners must also include guaranteed payments for services rendered to or on behalf of the partnership as net earnings from self-employment.
  • If you are a limited partner of a partnership (or treated as a limited partner in an LLC) that carries on a trade or business, only guaranteed payments you receive for services you rendered to or on behalf of the partnership are net earnings from self-employment. Limited partners do not pay self-employment tax on their distributive share of partnership income except as to the guaranteed payments.

Additional Information:


Category: Small Business, Self-Employed, Other Business
Subcategory: Entities: Sole Proprietor, Partnership, Limited Liability Company/Partnership (LLC/LLP), Corporation, Subchapter S Corporation

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The OMB number for this study is 1545-1432.
If you have any comments regarding this study, please write to:
IRS, Tax Products Coordinating Committee
SE:W:CAR:MP:T:T:SP
1111 Constitution Avenue NW
Washington, DC 20224