Taxes Q & A- Are partners considered employees

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

Partners are considered to be self-employed. If you are a member of a partnership that carries on a trade or business, your distributive share of its income or loss from that trade or business is net earnings from self-employment. Limited partners are subject to self-employment tax only on guaranteed payments, such as salary and professional fees for services rendered.

References:

Form 1065 Instructions, U.S. Partnership Return of Income

Publication 334, Tax Guide for Small Business

Publication 541 , Partnerships

Source: www.irs.gov