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 an 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.

The quiz does not replace the need for a tax professional. Ask your tax advisor to be sure. 

You also can call us at  855-829-9243 if you have questions about how we classify workers.

Which of the following best describes the type of work this worker does?
Electrical and construction workers
Do you as an employer direct or control the services this worker performs?
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 IRS?
Will this worker have an active account with the state Department of Revenue (DOR) when you hire them or within a reasonable time after you hire them?
Will this worker have an active account with any other state agency when you hire them or within a reasonable time after you hire them?
Will this worker have a Unified Business Identifier (UBI) number when you hire them or within a reasonable time after you hire them?
At the time you hire this worker, do they maintain their own set of books or records that reflect all income and expenses of their business?
Choose the option that applies to this worker when you hire them:
All other industries
Does this worker direct or control 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 IRS?
Will this worker have an active account with the state Department of Revenue (DOR) when you hire them or within a reasonable time after you hire them?
Will this worker have an active account with any other state agency when you hire them or within a reasonable time after you hire them?
Will this worker have a Unified Business Identifier (UBI) number when you hire them or within a reasonable time after you hire them?
At the time you hire this worker, do they maintain their own set of books or records that reflect all income and expenses of their business?

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: