How to Determine Employee Status for Taxes

A worker or a class of workers can file a request with the Internal Revenue Service (IRS) to determine employment status as either an employee or as an independent contractor. After the IRS receives the Form SS-8 from the worker, it's sent to the employer involved since there are financial implications to both parties. An employer may also initiate such a request.

Instructions

Difficulty: Moderate

1. Determine if you are improperly classified as an independent contractor rather than as an employee. As a self-employed contractor you would be liable for self-employment taxes rather than the employer paying half of those taxes, and you would not be entitled to other employee benefits.
2. Download Form SS-8 from the IRS website (see Resources below). Review the process in the general instructions as to how the worker status is determined.
3. Complete the information requested in Part I of the form, including the reasons for making the request and the description of the work done. Attach copies of supporting documents when filing this form.
4. Describe the behavioral control and the financial control by the employer in Part II and Part III of Form SS-8. This would include the daily activities of the worker and how compensation is paid.
5. List any benefits provided and other relationship factors in Part IV of the form. Complete Part V if the worker is a salesperson or provides a direct service to customers.
6. Sign and date the form and send it to the appropriate IRS office, which is based on where the employer is located as shown in the instructions. The resolution of this request could take a considerable amount of time.