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ITG FAQ #4 Answer-As an employer exercising fishing rights-related activities, of what should we be aware?

As an employer exercising fishing rights-related activities you should:

  • Verify your status as a qualified Indian entity.
  • Verify your employee’s proof of tribal membership.
  • Verify time allocated to fishing versus non-fishing activity. For example, consider a game warden that is responsible for protecting other wildlife and has other duties, as well as patrolling the treaty waters of his tribe. His employer should verify the percentage of time he engages in fishing rights-related activities of his tribe.
  • Maintain records to support each employee’s time allocation.
  • Maintain records to support the 90% gross receipts rule.
  • Do not include exempt wages on Form 941, Form 940, or Form W-2.
  • Wages paid for non-fishing activities are subject to all applicable employment taxes and employment tax reporting, including Form W-2.
  • If only fishing rights-related income is paid to an individual, no Form W-2 is required.
  • A letter stating the amount and tax-exempt nature of his/her wages may be issued to the employee to be used for various non-tax purposes, such as bank loans.

For additional information, please see FAQs for Indian Tribal Governments regarding IRC Section 7873.

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Page Last Reviewed or Updated: 18-Jan-2017