Question: Are board members considered common law employees or statutory employees for the purpose of tax withholding and reporting? Are they considered employees at all?

Response: Ed. Code 35120 defines the acceptable levels of compensation for board members, based on average daily attendance of the district by which they are employed. The payment of this compensation is done through the payroll process. The board member must submit a W-4 to define their withholding choices. The amount of compensation to a board member may be minimal enough in nature so that no taxes are actually withheld. However, the compensation is reported on Form 1040 at tax time as compensation.

In some limited cases, the earnings of a board member may earn PERS service credit. Please contact your legal counsel or retirement advisor for clarification on these circumstances.