Page 9 - Employers Supplemental Guide

9:05 - 23-Dec-2019
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The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
business of putting the sitters in touch with individuals who their workers as employees for future tax periods may be
wish to employ them (that is, a companion sitting place- eligible to participate in the VCSP if certain requirements
ment service) won't be treated as the employer of the sit- are met. File Form 8952 to apply for the VCSP. For more
ters if that person doesn't receive or pay the salary or wa- information, go to IRS.gov/VCSP.
ges of the sitters and is compensated by the sitters or the
persons who employ them on a fee basis. Companion sit-
ters who aren't employees of a companion sitting place- 2. Employee or Independent
ment service are generally treated as self-employed for all
federal tax purposes. However, the companion sitter may Contractor?
be an employee of the individual for whom the sitting serv-
ices are performed; see Pub. 926. An employer must generally withhold federal income

Misclassification of Employees taxes, withhold and pay over social security and Medicare
taxes, and pay unemployment tax on wages paid to an
employee. An employer doesn't generally have to with-
Consequences of treating an employee as an inde- hold or pay over any federal taxes on payments to inde-
pendent contractor. If you classify an employee as an pendent contractors.
independent contractor and you have no reasonable basis
for doing so, you’re liable for employment taxes for that Common-Law Rules
worker and the relief provision, discussed next, won't ap-
ply. See section 2 in Pub. 15 for more information. To determine whether an individual is an employee or an

Relief provision. If you have a reasonable basis for not independent contractor under the common-law, the rela-
tionship of the worker and the business must be exam-
treating a worker as an employee, you may be relieved ined. In any employee-independent contractor determina-
from having to pay employment taxes for that worker. To tion, all information that provides evidence of the degree
get this relief, you must file all required federal information of control and the degree of independence must be con-
returns on a basis consistent with your treatment of the sidered.
worker. You (or your predecessor) must not have treated
any worker holding a substantially similar position as an Facts that provide evidence of the degree of control
employee for any periods beginning after 1977. and independence fall into three categories: behavioral
Technical service specialists. This relief provision control, financial control, and the type of relationship of
the parties. These facts are discussed next.
doesn't apply for a technical services specialist you pro-
vide to another business under an arrangement between Behavioral control. Facts that show whether the busi-
you and the other business. A technical service specialist ness has a right to direct and control how the worker does
is an engineer, designer, drafter, computer programmer, the task for which the worker is hired include the type and
systems analyst, or other similarly skilled worker engaged degree of:
in a similar line of work.
This limit on the application of the rule doesn't affect the Instructions that the business gives to the worker.
determination of whether such workers are employees un- An employee is generally subject to the business' instruc-
der the common-law rules. The common-law rules control tions about when, where, and how to work. All of the fol-
whether the specialist is treated as an employee or an in- lowing are examples of types of instructions about how to
dependent contractor. However, if you directly contract do work.
with a technical service specialist to provide services for • When and where to do the work.
your business and not for another business, you may still
be entitled to the relief provision. • What tools or equipment to use.
Test proctors and room supervisors. The consis- • What workers to hire or to assist with the work.
tent treatment requirement doesn't apply to services per- • Where to purchase supplies and services.
formed after December 31, 2006, by an individual as a • What work must be performed by a specified
test proctor or room supervisor assisting in the administra- individual.
tion of college entrance or placement examinations if the
individual: • What order or sequence to follow.
• Is performing the services for a section 501(c) organi- The amount of instruction needed varies among differ-
zation exempt from tax under section 501(a) of the ent jobs. Even if no instructions are given, sufficient be-
code, and havioral control may exist if the employer has the right to
• Isn't otherwise treated as an employee of the organi- control how the work results are achieved. A business
may lack the knowledge to instruct some highly special-
zation for employment taxes. ized professionals; in other cases, the task may require lit-
Voluntary Classification Settlement Program (VCSP). tle or no instruction. The key consideration is whether the
Employers who are currently treating their workers (or a business has retained the right to control the details of a
class or group of workers) as independent contractors or worker's performance or instead has given up that right.
other nonemployees and want to voluntarily reclassify

Publication 15-A (2020) Page 7