Independent contractors

A common mistake employers make when filing tax reports is misclassifying employees as independent contractors. Learn how to determine a worker’s status.

Is your worker your employee or an independent contractor? It matters how you classify them when you file your quarterly tax and wage report. You pay unemployment taxes on employees but not for independent contractors.

If we discover a mistake on your report, you will need to pay back taxes for all misclassified workers, plus penalties and interest.

Avoid a penalty!

Test your worker's status

Answer these questions to determine if a worker is an independent contractor.

This is not tax advice. If you are not sure how to classify a worker, please consult your tax advisor or call us at 855-829-9243.

If you do not classify your workers correctly, you may have to pay back taxes, plus penalties and interest.

Which of the following best describes the type of work this worker does?
Electrical and construction workers
Does this worker have direction or control over the services they perform?
Check the option that applies to services this worker performs:
Check the option that applies to this worker:
Is this worker responsible for filing a schedule of expenses with the Internal Revenue Service (IRS)?
On the effective date of the contract or within a reasonable period after the effective date of the contract, does this worker have an active account with the Department of Revenue (DOR)?
On the effective date of the contract or within a reasonable period after the effective date of the contract, does this worker have an active account with Active account with any other state agency?
On the effective date of the contract or within a reasonable period after the effective date of the contract, does this worker have a Unified Business Identifier (UBI) number?
On the effective date of contract of service, does this worker maintain a separate set of books or records that reflect all items of income and expenses of the business that they conduct?
Choose the option that applies to this worker as of the effective date of the contract:
All other industries
Does this worker have direction or control over the services they perform?
Choose the option that best describes the services this worker performs.
Choose the option that best describes this worker.
Is this worker responsible for filing a schedule of expenses with the Internal Revenue Service (IRS)?
On the effective date of the contract or within a reasonable period after the effective date of the contract, does this worker have an active account with the Department of Revenue (DOR)?
On the effective date of the contract or within a reasonable period after the effective date of the contract, does this worker have an active account with any other state agency?
On the effective date of the contract or within a reasonable period after the effective date of the contract, does this worker have a Unified Business Identifier (UBI) number?
On the effective date of contract of service, does this worker maintain a separate set of books or records that reflect all items of income and expenses of the business that they conduct?

Contractor

Based on your answers, this worker may be an independent contractor. You may not need to include them in your quarterly reports.

We recommend you confirm this with your tax advisor, or call us for help at 855-829-9243.

Not a contractor

Based on your answers, this worker may not be an independent contractor. You should include them on your quarterly reports. 

We recommend you confirm this with your tax advisor or call us for help at 855-829-9243.

Find more help

Learn more about how to file your quarterly tax and wage report. You can also read our employers' guide to paying taxes.

If you are unsure whether a worker qualifies as an independent contractor, you also can: