POMS Reference

Table of contents Recent changes
Contact
Back

RS 01802: Self-Employment - Trade or Business

Effective Dates: 09/15/1997 - Present

A. BACKGROUND

Partners ordinarily contribute services, as well as capital, for the purpose of producing partnership profits. The partnership agreement may provide that one or more of the partners will receive payments for a salary, payments for use of capital, or interest on capital contributions, irrespective of whether the partnership has ordinary net income or loss. Such payments are called guaranteed payments.

B. OPERATING POLICY

  1. The guaranteed salary of a partner is allowed as a business deduction in computing partnership income.

  2. The receiving partner is not considered an employee of the partnership.

  3. Guaranteed salary payments are not “wages” but NESE.

Previous:
RS 01801: Coverage of Self - Employment - General
Up:
RS 018: Coverage of Self-Employment
Next:
RS 01803: Net Earnings from Self-Employment
The materials available at this web site are provided free of charge, for informational purposes only, and without warrant by True Link Financial, Inc., and are not legal advice or Social Security benefits advice. You should contact your attorney to obtain advice with respect to any particular issue or problem, or the Social Security Administration with any general inquiries. Click here to view this section of the POMS on the Social Security Administration website.