(Revised 01/01/04 ML2893)
An owner or employee of a closely held (just a few shareholders) or other corporation is not a self-employed individual. If an individual receives a salary from the corporation, the individual is considered an employee of the corporation and the salary is counted as earned income. Corporations are separate entities, and the corporation is responsible for its debts and obligations.
Shareholders who only receive dividends are not entitled to the costs of producing self-employment income or the earned income disregard. The dividends are counted as unearned income and must be annualized.
