An independent contractor is a person who is contracted to perform services without having the legal status of an employee. This section provides information specific to these individuals.
Independent contractors are generally individuals who follow an independent trade, business or profession in which they offer their services to the public and complete such services free of control or direction from the payer as to the means and methods used to complete the task. Under the Internal Revenue (IRS) general rules, an individual is an independent contractor (IC) if you, the payer, have the right to control the results of the work, not the means and methods.
The IRS uses the 20 Factors of the Common Law Test to determine whether an individual is an employee or an IC. These 20 factors or 20 questions assist in determining if a relationship or evidence of control/right to control (behavioral and financial) exists between the payer and worker.
Under Internal Revenue Service rules, anyone who performs services for you is your employee if you can control what will be done and how it will be done, even if freedom of action is granted to the individual worker.
A worker may always be classified as an employee even if the worker meets the criteria of an independent contractor.
It is illegal to knowingly classify an employee as an independent contractor in order to avoid Affirmative Action recruitment efforts, and or payment of employment taxes, fringe benefits, etc. The IRS imposes fines and penalties for misclassification of service.
The IRS considers a worker to be an independent contractor if he or she:
To begin engaging a contractor, please complete the Request for Advance Approval for Independent Contractor Services form.
If the individual is a US Citizen with a valid Social Security number, please complete the Request for Taxpayer Identification Number and Certification (W-9).
If the individual is other than a US Citizen, please contact our Foreign National Tax Unit at 645-7777 for further assistance. They will advise which forms are required for this individual.
All RF Contractor payments require a valid social security number or ITIN before payment may be released.
Once advance approval has been submitted, please complete the Payment for Independent Contractor Services form.