The Economic Policy Institute estimates that 10%–15% of employers misclassify at least one worker as an independent contractor. Whether intentional or not, misclassification is a crime that can result in serious financial penalties, and in some cases, jail time.

Running your business is an exciting venture—until tax season. Among the numerous tax-related issues to consider is whether your employees are correctly classified as employees or independent contractors. It’s critical to understand this distinction, because as an employer, you’re responsible for various tax withholdings and filings. To guide you, the Internal Revenue Service (IRS) has an independent contractor test to help classify workers as W-2 employees or 1099 contractors.

While the IRS has a clear demarcation between employees and independent contractors, it’s still difficult to comprehend every aspect of the classifications. What’s more, some states may operate on a different test beyond the one used by the IRS. And for business based in California, classification is made more challenging with the passage—and subsequent exemptions—of the AB5 law. 

To run a successful and compliant business with independent contractors as part of your workforce, you must first understand how the IRS categorizes independent contractors. This webinar will explain the latest test used by the IRS to classify workers, how states’ independent contractor tests vary from the IRS, and how California’s laws for classifying workers affects businesses with contractors.

In this webinar, we’ll define what an independent contractor is and list examples, as well as explore the pros and cons of being an independent contractor.

It will also cover the tests to determine whether a person is an independent contractor of employer. 

The following tests will be discussed:

  • IRS 20-Factor Test
  • The ABC Test
  • The Economic Realities Test
  • DOL  Test
  • Worker classification test by state

Learning Objectives:

  • Define employee and independent contractor 
  • Identify the categories of evidence used to determine worker status 
  • Describe the use of Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding with IRS  and Form 8919, Uncollected Social Security and Medicare Tax on Wages 
  • Recognize requirements for Section 530 relief
  • IRS 20 Factor Test – Independent Contractor or Employee?
  • How does the IRS determine whether a worker is an employee or an independent contractor?
  • IRS common law test
  • Does the IRS use the 20-factor test for worker classification?
  • ABC test vs. the common law test
  • California’s AB5 law and worker classification
  • What are the penalties for worker misclassification? 
  • How can you stay compliant with the IRS worker classification rules?
  • How to create independent contractor relationships that comply with current DOL, NLRB, IRS, and state agency requirements

Credits and Other information :

  • IRS CPE Credits: 2.0 TAX
  • Session Prerequisites and preparation: None
  • Session learning level: Basic
  • Location: Virtual/Online
  • Delivery method: Group Internet Based
  • IRS Course ID: DFFSC
  • Attendance Requirement: Yes
  • Session Duration: 120 Min
  • Case Studies and Live Q&A session with speaker
  • PowerPoint presentation for reference

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3. What is web download and transcript or On demand session?

 The web download grants access to the webinar recording, enabling you to receive a link to download and save it on your computer for convenient viewing, multiple times.

 The transcript offers comprehensive written material from the webinar, ensuring you have detailed documentation of the content presented.

 On demand session is when we conduct the webinar as per your available dates after the live training. You will get access to the training for 24 hours.

4. Is there an opportunity to ask questions to the speaker during the session?

Each webinar wraps up with a Q&A session, giving you the opportunity to interact with industry experts and receive answers to all your queries.

5. We provide the following CE credits to the professionals on the approved courses.

  • IRS
  • HRCI
  • SHRM

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9. How can I cancel my registration?

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  • An internet connection – broadband wired or wireless
  • Speakers and a microphone – built-in, USB plug-in, or wireless Bluetooth

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