I’ll bet you’re wondering: Will IRS Independent Contractor Amnesty Cover States Too? It’s too soon to say in many cases, but some states are picking up the IRS deal.
If you’re a small business owner using independent contractors, then you’ve probably been watching the new IRS independent contractor amnesty campaign. I’ve written about this subject here before and it has become a hot topic for many business news sources. Now, there’s a new twist – will the states adopt the campaign too?
According to Forbes, states may be entering the fray in their own way.
Taking on talent is a big deal. Indeed, hiring itself can be a big deal on a small budget; so many employers walk a fine line with their workers; are they employees or are they independent contractors? To the IRS, that’s no fine line and they’re not fond of those who cross back and forth knowingly (or unknowingly, for that matter). As with several other initiatives over the years, the IRS has chosen to show its kinder, gentler, side with an amnesty program to allow employers to “reclassify” independent contractors as actual employees (under the assumption that they ought to have been classified as such).
The kink in the works, as with all federal issues that address issues that independently concern the states, is whether the states would follow suit. For a business owner, why accept amnesty from the IRS only to be hammered by your home state?
According to Robert Wood at Forbes, some states are turning to the amnesty, like Minnesota. Of course, Minnesota also is adding some extra information requirements, extra qualifications, and a deadline where the IRS has none.
Will your home state begin amnesty, as well? And if it does, how will you go about safely navigating both state and federal programs? Contact out office today and we will walk you through all the answers to these questions.
Reference: Forbes (October 25, 2011) “States Start Conforming to IRS Independent Contractor Amnesty”