In Part One, we reviewed the Common Law Rules and evidence for determining if a person providing services is an employee or an independent contractor.
Let’s look at the most common forms and documentation you might run into:
After reviewing the three categories of evidence, if you are still unsure if a worker is an employee or an independent contractor, the business can file Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding (PDF) with the IRS. The form may be filed by either the business or the worker. The IRS will review the facts and circumstances and officially determine the worker’s status.
Be aware that it can take up to six months to get a determination, but a business that continually hires the same types of workers to perform particular services may want to consider filing the Form SS-8 (PDF).
Plan B: Complete For Your Records Only
Instead of sending this form to the IRS and then waiting six months to hear back, it’s not uncommon for people to complete the Form SS-8 as a way to facilitate a conversation between the employer and the worker, and help both parties decide how to most appropriately classify the worker.
If you feel that you should have been paid as an employee versus a contractor, there is a second option available to you. You can complete and attach a Form 8919 to your federal tax return. You should be aware that submitting a Form 8919 with your taxes will most likely cause the IRS to contact your employer. According to the instructions:
Purpose of form:
Use Form 8919 to figure and report your share of the uncollected social security and Medicare taxes due on your compensation if you were an employee but were treated as an independent contractor by your employer. By filing this form, your social security and Medicare taxes will be credited to your social security record. For an explanation of the difference between an independent contractor and an employee, see Pub. 1779, Independent Contractor or Employee