Home > Workmens Compensation > The FEDS are coming—no more independent contractors

The FEDS are coming—no more independent contractors

The two new federal programs you have been hearing about are targeting employers who have misclassified their own employees and who have issued 1099s to independent contractors. They claim this misclassification is used to avoid paying payroll taxes on people who should be employees or covered workers.

These programs are the Voluntary Classification Settlement Program to submit 10% of the normal payroll taxes for one year with a gratis for three years; and the new IRS 1% amnesty program for misclassifying employees. The latter may not be a good thing with the IRS probably sharing your information with other agencies according to Mike Reilly at Lane Powell in Seattle.

Find a competent classification audit reviewer each year to keep up with the changes in federal and state compliance workers’ compensation reporting. You will stay in business much longer.

For more information, contact Ted Carlson, CFE at WKRcomp LLC in Seattle at 206.432.9592.

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