Statutory Nonemployees – A Few Examples
The term Statutory nonemployees is a very hybrid non-employee status. As read on the IRS Website:
There are generally two categories of statutory non-employees:
- direct sellers
- licensed real estate agents.
They are treated as self-employed for all Federal tax purposes, including income and employment taxes, if:
- substantially all payments for their services as direct sellers or real estate agents are directly related to sales or other output, rather than to the number of hours worked, and
- their services are performed under a written contract providing that they will not be treated as employees for Federal tax purposes.
Companion sitters who are not employees of a companion sitting placement service are generally treated as self-employed for all federal tax purposes. Let us see who the IRS deems companion sitters.
Companion sitters. Companion sitters are individuals who furnish personal attendance, companionship, or household care services to children or to individuals who are elderly or disabled. A person engaged in the trade or business of putting the sitters in touch with individuals who wish to employ them (that is, a companion sitting placement service) won’t be treated as the employer of the sitters if that person doesn’t receive or pay the salary or wages of the sitters and is compensated by the sitters or the persons who employ them on a fee basis. Companion sitters who aren’t employees of a companion sitting placement service are generally treated as self-employed for all federal tax purposes.
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