Define Fillable Fields In Legal Kansas Independent Contractors Forms For Free

9s and 1099s are tax forms that are required when employers work with an independent contractor. Form 9 is completed by the independent contractor and provides details on who they are. Form 1099NEC is completed by the employer and details the wages paid to the contractor.

As explained above, the 20-Factor Test provides criteria for assessing how much control and independence a worker has in their relationship with a hiring company. The general goal is to understand whether a business has the right to direct and control a worker's actions.

If you paid someone who is not your employee, such as a subcontractor, attorney or accountant $600 or more for services provided during the year, a Form 1099-NEC needs to be completed, and a copy of Form 1099-NEC must be provided to the independent contractor by January 31 of the year following payment.

When deciding whether you can safely treat a worker as an independent contractor, there are two separate tests you should consider: The common law test; and The reasonable basis test. The common law test: IRS examiners use the 20-factor common law test to measure how much control you have over the worker.

The law further states that independent contractor status is evidenced if the worker: (1) has a substantial investment in the business other than personal services, (2) purports to be in business for himself or herself, (3) receives compensation by project rather than by time, (4) has control over the time and place ...

In 2019, the IRS found that this test was too complicated and difficult to apply consistently and revealed a new way of classifying workers in their Employer's Supplemental Tax Guide (2020). Essentially, the IRS compressed the 20-factor test into what we now know as the three-pronged test or the common law test.