How long does an ss8 determination take?
It takes about two months to get approved in the program. Employers who are approved receive a guarantee that the IRS will not audit their past payroll activities. And they only have to pay 10% of the payroll taxes they would have paid for the previous year, without any penalties. This is a terrific deal.
What happens when you file an ss8?
After a worker files Form SS-8, the IRS sends a letter to the business. It identifies the worker and includes a blank Form SS-8. The business is asked to complete and return it to the IRS, which will render a classification decision. But the Form SS-8 determination process doesn’t constitute an official IRS audit.
How do I fill out an ss8 form?
Completing Form SS-8 Answer all questions as completely as possible. Attach additional sheets if you need more space. Provide information for all years the worker provided services for the firm. Determinations are based on the entire relationship between the firm and the worker.
How can you find out if someone is an independent contractor?
To classify someone as an independent contractor, organizations must show that:
- The worker is free from managerial control and direction.
- The worker performs work that is outside the hirer’s core business.
- The worker customarily engages in “an independently established trade, occupation or business”
Who files ss8?
Firms and workers file Form SS-8 to request a determination of the status of a worker for purposes of federal employment taxes and income tax withholding.
How does an ss8 work?
IRS Form SS-8 is a request to the IRS to determine whether a worker is an employee or an independent contractor. Classifying a worker as an independent contractor can be beneficial for businesses because they don’t have to pay employment taxes for this type of worker, but misclassification is against IRS rules.
Do I need to file a ss8?
The information you provide to the IRS on Form SS-8 is used to differentiate independent contractors from employees. You can be liable for these employment taxes for these individuals if your business classifies an employee as an independent contractor and you don’t withhold and match them.
How do you determine if a worker is an independent contractor or an employee?
When the principal has the “right of control,” the worker will be an employee even if the principal never actually exercises the control. If the principal does not have the right of control, the worker will generally be an independent contractor.
Who should file SS8?
Do I need to file a SS8?
Why do companies hire contractors instead of employees?
This is because employees are considered the most expensive cost to any company, and the most risk. Companies address these costs by hiring long-term contractors. When engaging a professional, a contract staffing agency takes on the risk, finances the employees’ benefits, and matches all taxes.
What is a Form SS-8 worker status determination?
Filing a Form SS-8 requesting a “worker status” determination means you or the firm is asking the Service to establish if the services you provide to the firm are those of an employee or an independent contractor.
What is the SBA 8 (a) contractor program?
One of the tools at their disposal to accomplish this is the SBA’s 8 (a) contractor program. Named for the section of the Small Business Act, this program is designed to help small, disadvantaged businesses complete for federal contracts. Many types of contracting are available in the program, supply, various service as well as construction.
What types of contracting are available in the 8a program?
Many types of contracting are available in the program, supply, various service as well as construction. A portion of all federal contracting is set aside for contractors in the 8a program. What are benefits of becoming 8 (a) certified? Access to business training, counseling, assistance. Also development for business executives
What is misclassification on Form SS-8?
Misclassification usually happens when workers are classified as independent contractors, but the workers are actually determined to be employees. Form SS-8 effectively asks the IRS whether you should withhold taxes from payments to certain workers because they’re employees. Who Uses Form SS-8?