U.S. Regulations

The IRS and Classification of IC/Employees

Confused about whether you are an independent contractor (IC), a statutory employee (SE), or an employee? Wondering whether you have classified the MTs working for you properly? Trying to interpret IRS rules on IC versus employee status can be confusing, and, if done incorrectly can result in penalties and back taxes for both the MT and/or the employer. The IRS has simplified the process to receive a definitive ruling on your status that anyone can take advantage of. IRS Form SS-8, Determination of Worker Status for the Purpose of Federal Employment Taxes and Income Tax Withholding. This form can be used to clarify your individual tax determination and is available at: http://www.irs.gov/pub/irs-pdf/fss8.pdf

Additional information regarding this issue can be found at the following links:

IRS instructional documents:
Independent contractors versus employee

IRS training manual for determining IC versus employee — 160 pages PDF file
http://www.irs.gov/pub/irs-utl/emporind.pdf

Publication 15-A
http://www.irs.gov/publications/p15a/ar02.html#d0e298