A beneficiary serving as the director of a corporation is engaged in self-employment.
However, the director of a corporation may also perform services as an employee e.g.,
services as the president of the corporation.
Prior to the 1987 amendments, director fees were counted under the ET in the year
the beneficiary reported the fees for tax purposes (unless the SEI exclusion in RS 02505.125 applied). Generally, fees were reported as NESE for the year the fees were received.
Under the 1987 amendments, fees for performing services as the director of a corporation
in a TY that began after 1987, were required to be reported for both ET and tax purposes,
in the TY the services were performed, unless such fees were actually paid or received
before that year.
Under the 1990 amendments, fees for serving as the director of a corporation in a
TY that begins after December 31, 1990, must once again, be reported for tax (and
computational) purposes, as they were before the 1987 amendments i.e., in the taxable
year the fee payments are received. However, the 1990 amendments did not change the
requirement that director fees must be counted under the ET in the taxable year the
services were rendered.