25 Feb / Statutory Employee
Statutory Employees are essentially independent contractors. It is mostly at the convince of the contractor that an vendor decides to treat them as a statutory employee. They are not common law employees. The are not eligible for benefits. This classification is available to certain drivers to deliver laundry, bread, milk or food. These individuals are paid on a commission basis and not at an hourly rate. These people would have the ability to reports this income and expenses on Schedule C of their personal income tax return. Individuals who receive both commission and wage are not statutory employees according to the IRS (Code Sec. 3121(d)(3)). Life insurance salespersons, home workers, and certain other commissioned salespersons are likely to be considered statutory employees.
If a payor isn’t sure whether the payee is an employee or independent contractor, the payor may get an IRS ruling by filing Form SS-8. Decisions are reviewable by the Tax Court.
Tax advice contained in this communication, including attachments and enclosures, is not intended or written to be used, and may not be used for the purpose of (i) avoiding tax related penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any tax-related matters addressed herein.