No, LLC members typically do not receive W-2 forms. A W-2 form is used to report wages and salary income earned as an employee of an employer. LLC members are not considered employees of the LLC; instead, they are considered self-employed or owners of the business.

Schedule C and Schedule E

For tax purposes, LLC members report their income from the LLC on their tax returns, specifically on Schedule C (Profit or Loss from Business) for single-member LLCs or on Schedule E (Supplemental Income and Loss) for multi-member LLCs. The income is reported as self-employment income or business income, not as wages.

However, in some situations, an LLC member may also work as an employee of the LLC in addition to their ownership role. In such cases, if they receive a salary or wages for their work as an employee, the LLC should issue a W-2 form to report the employee’s earnings, and the employee would report this income on their tax return. This would be separate from any income or distributions the member receives as a result of their ownership stake in the LLC.

The LLC is to maintain clear records and documentation of any payments made to LLC members, whether they are for salary, distributions, or other forms of compensation, to ensure accurate tax reporting and compliance with tax regulations. Consulting with an accountant or tax professional with expertise in small business taxation can be beneficial in navigating the complexities of tax reporting for LLC members.