Employee vs Independent Contractor — IRS 20-Factor Test
Misclassifying employees as contractors triggers back FICA, federal withholding, and penalties. The IRS test focuses on behavioral, financial, and relationship control.
Worker classification determines tax withholding, benefits eligibility, and overtime rules. The IRS uses a three-factor common-law test; CA and other states use stricter ABC tests.
Frequently Asked Questions
More in IRS & Financial
What Is an IRS Installment Agreement?
An IRS Installment Agreement lets you pay back taxes in monthly payments. Here are the types, eligibility rules, fees, and how to apply.
How Does an Offer in Compromise Work?
An Offer in Compromise lets you settle IRS tax debt for less than you owe — but only if you genuinely cannot pay in full. Here is how the IRS evaluates an offer.
How to Stop an IRS Wage Garnishment
An IRS wage garnishment can take up to 85% of your paycheck. Here's how to get it released — sometimes within days.
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