Hi, 

I was able to check the articles of incorporation, the husband and wife are both registered on the form.  Form 1120S does not show any type of compensation for shareholders nor for line 7 for Compensation for Directors.  I do see that under "Other Deductions" there is an expense for  "Contracted services and independent contractor expenses".  I am very confused as to other people said that they are considered employees because they are owners and work for the company thus needed to have been paid with payroll and given a W2.