When do you file Form 8919? | DCR Workforce Blog

When do you file Form 8919?

If you happen to work as an independent contractor, and you negotiated hard for that status with your employer, you need to follow some guidelines so neither of you lands on the wrong side of the law.  You will need a federal or state Tax ID because the IRS is looking harder at employers who report the earnings of independent contractor under social security numbers.  However, if you are harboring real doubts whether the work you do for your employer can be classified under that category you may try to avoid self-employment taxes by filing Form 8919. By doing this, you may be saving on paying the employer’s component of Social Security and Medicare taxes, but simultaneously blowing the whistle on your employer.

The IRS and Wage & Hour Division of the DOL use the 8919 filer data to identify possible offenders under the misclassification category. The audit process would also involve clearly revealing your information to the employer as the whistle-blower and you may possibly lose the opportunity to work for that particular employer ever again, either because they went bust or just would not consider taking you on again.

If the IRS investigation were to conclude that the employer misclassified the worker and failed to meet the employee reporting and withholding requirements, the liability for misclassification could include unpaid taxes as well as penalties for wage and hour laws and also overtime pay and may prove really expensive to the employer. There are cases where, in small businesses, an employer wishes to start withholding the taxes and meet the regulatory requirements but gets dissuaded by the employees who find that their pay check gets smaller (after the withholding of taxes) and quit the work or threaten to quit, putting the existence of the business itself at risk. Once caught in the dragnet, no employer can hope to prove a claim of innocence following industry practice and not attempting to dodge the payment of legitimate taxes.

The IRS encourages people who are in doubt about their classification to file Form SS-8, also known as Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding.  The IRS will then decide the status of the worker and sends a determination letter. If the IRS states that you are an employee, you have to file Form 8919. Even if the IRS categorizes you as a Sec 530 employee or ‘not an independent contractor’ – the onus of filing Form 8919 and paying Self Employment taxes lies with you.

If a company, for whatever reasons, chooses to convert an employee into an Independent Contractor, to deliver the same or similar services (under the same supervision and control), the IRS treats the person as an employee only. An employee’s status may also determined by comparing the work, the timing, the direction and control with others classified as employees to realize that the IC classification will not stick and it is necessary to file Form 8919. It is also safe to file 8919, if any of your co-workers have filed SS-8 and received an official determination of their status as employees from the IRS. Even if you have filed Form 8919, and are still awaiting the official letter of determination of your status, the IRS advises you to file Form 8919.

The content on this blog is for informational purposes only and cannot be construed as specific legal advice or as a substitute for competent legal advice. They reflect the opinions of DCR Workforce and may not reflect the opinions of any individual attorney. Do contact an attorney for advice specific to your issue or problem.

2 responses to “When do you file Form 8919?”

  1. David Johnson says:

    I have work for my employer for the anual income for $18,000 it was seven deductions taking out of my paycheck every week. The only tax return I’m getting back is state and federal. I do not work for that employer know more so can I use the 8919 tax form to get back to get back all that income or can I sue the employer for those seven deductions. I realize the laws from last years is the same for this year. Employers is taking an advaintage of us as employees in the work industry. How can I get my 8919 tax form.

    • admin says:

      Dear Mr. Johnson,

      Thank you for writing in. Were you classified as an independent contractor by your ex-employer?
      Has this employer issued you with a 1099-Misc for your tax deductions?

      If you wish to dispute the classification as an independent contractor, you need to file Form SS-8 first as mentioned in Para 5 of the blog and follow it with the Form 8919.

      1. Form SS-8 (Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding) has to be filed by you first.
      2. Form 8919 can be used by you if you worked for this employer after the beginning of tax year 2007.

      • If you (or any of your colleagues in a similar role) have already filed an SS-8 and if so have you received any correspondence from the IRS stating that states you are an employee?
      • Were you previously treated as an employee by the same firm when you performed services in a similar capacity and under similar direction and control.
      • Is any colleague/s of yours performing similar services under similar direction and control but treated as employee/s.

      Please note that this response cannot be construed as specific legal advice or as a substitute for competent legal advice. Do contact an attorney for advice specific to your issue.

Lalita is a people/project manager with extensive experience in operations, HCM and training and development across industries like banking, education, business consulting, BPO and information technology. She believes in a dynamic approach to life and learning as change is the only constant.