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Misclassified Workers Can File Social Security Tax Form
Generally, a worker who receives a Form 1099 for services provided as an independent contractor must report the income on Schedule C and pay self-employment tax on the net profit. However, at times the worker is incorrectly treated as an independent contractor when they are actually an employee. When this happens, Form 8919 can be used by workers who performed services for an employer but the employer did not withhold the worker’s share of Social Security and Medicare taxes.
In addition, the worker must meet one of several criteria indicating they were an employee while performing the services. The criteria include:
- The worker has filed Form SS-8 and received a determination letter from the IRS stating they are an employee of the firm (see above), or
- The worker has received other correspondence from the IRS that states they are an employee, or
- The worker was previously treated as an employee by the firm and they are performing services in a similar capacity and under similar direction and control, or
- The worker’s co-workers are performing similar services under similar direction and control and are treated as employees, or
- The worker’s co-workers are performing similar services under similar direction and control and filed Form SS-8 and received a determination that they were employees, or
- The worker has filed Form SS-8 with the IRS and has not yet received a reply.
By using Form 8919, the worker’s Social Security and Medicare taxes will be credited to their Social Security record. To facilitate this process, the IRS will electronically share Form 8919 data with the Social Security Administration.