IRS Tax Publications
If you are not sure whether you are an employee or an
independent contractor, get Form SS-8, Determination
of Worker Status for Purposes of Federal Employment
Taxes and Income Tax Withholding. Publication 15-A,
Employer’s Supplemental Tax Guide, provides additional
information on independent contractor status.
IRS Electronic Services
You can download and print IRS publications, forms, and
other tax information materials on the Internet at www.irs.
gov. You can also call the IRS at 1-800-829-3676 (1-800-
TAX-FORM) to order free tax publications and forms.
Call 1-800-829-4933, the Business and Speciality Tax INDEPENDENT
Line, if you have questions related to employment tax CONTRACTOR
issues.
OR
EMPLOYEE
Publication 1779 (Rev. 3-2023) Catalog Number 16134L
Department of the Treasury Internal Revenue Service
www.irs.gov
Independent Contractor or Employee
Which are you? When You Are an Employee...
For federal tax purposes, this is an important distinction. Worker classification affects how you pay your federal income tax, . Your employer must withhold income tax and your
social security and Medicare taxes, and how you file your tax return. Classification affects your eligibility for social security portion of social security and Medicare taxes. Also,
and Medicare benefits, employer provided benefits and your tax responsibilities. If you aren’t sure of your work status, you your employer is responsible for paying social security,
should find out now. This brochure can help you. Medicare, and unemployment (FUTA) taxes on your
wages. Your employer must give you a Form W-2,
Wage and Tax Statement, showing the amount of
taxes withheld from your pay.
The courts have considered many facts in deciding Financial Control
whether a worker is an independent contractor or an
employee. These relevant facts fall into three main These facts show whether there is a right to direct or When You Are an Independent
control the business part of the work. For example:
categories: behavioral control; financial control; and Contractor...
relationship of the parties. In each case, it is very
important to consider all the facts – no single fact provides
Significant Investment – if you have a significant
investment in your work, you may be an independent
. The business may be required to give you Form
1099-MISC, Miscellaneous Income, to report what it
the answer. Carefully review the following definitions. contractor. While there is no precise dollar test, the
has paid to you.
Behavioral Control
investment must have substance. However, a significant
investment is not necessary to be an independent
. You are responsible for paying your own income
tax and self-employment tax (Self-Employment
contractor.
These facts show whether there is a right to direct or Contributions Act – SECA). The business does not
control how the worker does the work. A worker is an Expenses – if you are not reimbursed for some or all withhold taxes from your pay. You may need to make
employee when the business has the right to direct and business expenses, then you may be an independent estimated tax payments during the year to cover your
control the worker. The business does not have to actually contractor, especially if your unreimbursed business tax liabilities.
direct or control the way the work is done – as long as the
employer has the right to direct and control the work. For
expenses are high. . You may deduct business expenses on Schedule C of
Opportunity for Profit or Loss – if you can realize your income tax return.
example: a profit or incur a loss, this suggests that you are
Instructions – if you receive extensive instructions in business for yourself and that you may be an
on how work is to be done, this suggests that you are independent contractor.
an employee. Instructions can cover a wide range of
topics, for example: Relationship of the Parties
• how, when, or where to do the work These are facts that illustrate how the business and the
• what tools or equipment to use worker perceive their relationship. For example:
• what assistants to hire to help with the work Employee Benefits – if you receive benefits, such as
• where to purchase supplies and services insurance, pension, or paid leave, this is an indication
If you receive less extensive instructions about what that you may be an employee. If you do not receive
should be done, but not how it should be done, you benefits, however, you could be either an employee or
may be an independent contractor. For instance, an independent contractor.
instructions about time and place may be less important Written Contracts – a written contract may show what
than directions on how the work is performed. both you and the business intend. This may be very
Training – if the business provides you with training significant if it is difficult, if not impossible, to determine
about required procedures and methods, this indicates status based on other facts.
that the business wants the work done in a certain way,
and this suggests that you may be an employee.
