In the past, the IRS relied on a list of 20 common-law factors to classify workers. Now the IRS looks at just the following three factors to make the appropriate determination:


Does the company control or have the right to control what, how, and the number of hours the worker does
his/her job?


Are the business aspects of the worker’s job controlled by the payer? These include things like how the worker is paid, whether expenses are reimbursed, who provides supplies/tools, etc.

Type of Relationship

Are there written contracts or employee-type benefits (e.g. pension plan, insurance, paid vacation)? Are the services offered to the employer also available to the general public?

Generally, the more “control” an employer has over a worker the more likely the worker is an employee rather than an independent contractor.

If, after discussing your situation with your tax advisor, you still have questions about the determination, you may file Form SS-8 (Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding) with the IRS and get a determination directly from them regarding your specific situation.

If you choose NOT to file Form SS-8 and the IRS determines that an employee has been mis-classified as an independent contractor, you MUST file Form 8919 (Uncollected Social Security and Medicare Tax on Wages) to avoid additional tax, penalties, and interest resulting from the change in worker status.