SECA Tax on Corporate Payments
If you are an S corporation shareholder, your distributions
from the organization generally do not count as self-employment income
and are not subject to SECA tax.
However,
if you are a shareholder and also an officer of the company who performs
substantial services, you are considered an employee. Some reasonable
amount of compensation for your services must be considered salary
or wages, on which regular payroll taxes, including Social Security,
Medicare, and income tax withholding, must be paid. Your salary or
wages is not considered self-employment income.
Corporate
directors of either C or S corporations who receive fees are not considered
employees. Instead, their fees are considered self-employment income.
Again, if you are a corporate officer or other employee of either
a C or S corporation, your income is subject to regular payroll taxes
(including FICA) and you aren't considered self-employed for purposes
of SECA tax.
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