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A statutory employee is a person who is deemed to be an employee by statute. For an exempt organization, the most common employees in this category are its officers. In addition, while not as common in an exempt organization, the following workers are also statutory employees:
An employer should indicate on the worker's Form W-2 whether the worker is classified as a statutory employee. Statutory employees report their wages, income, and allowable expenses on Schedule C (or Schedule C-EZ), Form 1040. Statutory employees are not liable for self-employment tax because their employers must treat them as employees for social security tax purposes.