IRS Practice Unit: When Partner’s Share of Income Is Subject to Self-Employment Tax (IRC §1402)

Discussion of when individual partner’s distributive share of income is subject to Self-Employment Contributions Act (SECA) tax, the IRS Large Business and International Concept Unit released February 26. The IRS stated that unless an exception applies, a partner’s distributive share of ordinary business income is included in net earnings from self-employment and subject to SECA tax. The IRS noted that the practice unit applies to all arrangements treated as partnerships. [IRS Practice Unit PST/C/366_01_01-01 (Feb. 13, 2019)]

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