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If you are an S corporation shareholder, unlike a partner, 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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