Does my llc have employees?

There are two members in our LLC, me and the other owner. Are considered employees? I need to know to fill out form 941.

Answer

It depends on whether the LLC is taxed as a partnership or a corporation. Most LLCs are chosen because the permit partnership-taxation and corporate limited liability.

If that if the case, then members are not employees. Instead, you report the LLCs net income on form K-1 (the partnership form) to each member, from which each member calculates their income and self-employment tax (if any).

If your LLC is taxed as a corporation, then you and your "partner" (fellow shareholder--you aren't "partners" because this is taxed as a corporation) can collect a salary and therefore the LLC needs to perform the necessary payroll paperwork, withholdings, and payroll taxes.