Article: 50251
Overview
A statutory employee is a worker who, by law, is treated as an employee for certain tax purposes — even if they don’t fit the usual employee mold.
In exempt organizations, statutory employees are often corporate officers. Others who may fall into this category include:
- Full-time traveling or city salespeople who solicit orders from wholesalers, restaurants, or similar businesses for resale or supplies used in the buyer’s business.
- Full-time life insurance agents whose main business is selling life insurance or annuity contracts for one company.
- Agent-drivers or commission-drivers distributing meat, vegetables, bakery goods, beverages (except milk), or doing laundry or dry-cleaning services.
- Home workers who work on materials or goods provided by the employer.
Employers must indicate on the worker’s Form W-2 if they’re classified as a statutory employee (excluding corporate officers). These workers report their income and expenses on Schedule C, but they are not subject to self-employment tax since Social Security tax is handled by the employer.
How to Add Statutory Employee Information
To report statutory employee income:
- Go to Federal Taxes.
- Click Review.
- Click I’d like to see the forms I’ve filled out or search for a form.
- Enter Form W-2 or Schedule C in the search box and select the appropriate form.
- Enter your information and click Save.
Further Information
See IRS: Statutory Employees Overview and IRS: Exempt Organizations – Who Is a Statutory Employee for more information.