Firms and workers file Form SS-8 to request a determination of the status of a worker for purposes of federal employment taxes and income tax withholding .
What is an SS-8 determination?
If your employer has classified you as an independent contractor and you believe you should be considered an employee, you can file a Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding , with the IRS and ask the IRS to make a determination as to what your worker ...
What happens when you file form SS-8?
If a worker files Form SS-8, you’ ll receive a notification from the IRS requesting that you complete Form SS-8 . The notification discloses who filed the form and may even include some of the information provided on the form. If you don’t respond to the notification, the IRS will still classify the worker.
Should I file form SS-8?
Be prepared for workers filing the form
Workers seeking determination of their status can also file Form SS-8. Disgruntled independent contractors may do so because they feel entitled to health, retirement and other employee benefits and want to eliminate self-employment tax liabilities.
How do I fill out an SS-8?
- How did the worker apply for the job? ...
- Describe the work performed by the worker.
- Explain why you believe the worker is an employee or independent contractor.
- Attach a copy of any written agreement you have with the worker.
- Describe work assignments.
- Explain the worker’s daily routine.
How long does an SS-8 determination take?
It takes about two months to get approved in the program. Employers who are approved receive a guarantee that the IRS will not audit their past payroll activities. And they only have to pay 10% of the payroll taxes they would have paid for the previous year, without any penalties.
What does a 10 99 mean?
10-99 = Wanted/stolen record .
How do you determine if someone is an employee or independent contractor?
If the worker is paid a salary or guaranteed a regular company wage, they’re probably classified as an employee. If the worker is paid a flat fee per job or project , they’re more likely to be classified as an independent contractor.
How the IRS determines independent contractor status?
The general rule is that an individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done . The earnings of a person who is working as an independent contractor are subject to Self-Employment Tax.
What is difference between an employee and an independent contractor?
What’s the Difference Between an Independent Contractor and an Employee? ... For the employee, the company withholds income tax, Social Security, and Medicare from wages paid . For the independent contractor, the company does not withhold taxes. Employment and labor laws also do not apply to independent contractors.
What is form 8952 and when is it used?
This form is used to apply for the Voluntary Classification Settlement Program (VCSP) which provides an opportunity for taxpayers to voluntarily reclassify workers as employees for federal employment tax purposes.
Where do I send ss8?
Write “Protective Claim” at the top of the form, sign and date it. In addition, enter the following statement in Part III: “Filed Form SS-8 with the Internal Revenue Service Office in Holtsville, NY .
What is a form 8919?
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 earnings will be credited to your social security record.
What are the 3 types of employment status?
There are three types of employment status: employee, worker and self-employed . The three are often not in practice used correctly and the difference is not always known. An employee is an individual who has entered into or works (or worked) under the terms of a contract of employment.
What is the IRS 20 Factor Test?
The IRS 20-Factor Test, commonly referred to as the “Right-to-Control Test,” is designed to evaluate who controls how the work is performed . According to the IRS’s Common-Law Rules, a worker’s status corresponds to the level of control and independence they have over their work.
What is a Section 530 employee?
Section 530 is a relief provision that terminates a taxpayer’s employment tax liability with respect to an individual not treated as an employee if three statutory requirements are met: 1) reporting consistency; 2) substantive consistency; and 3) reasonable basis.
