WASHINGTON (AP) — The Internal Revenue Service is
offering a break to employers who come clean about wrongly classifying
workers as independent contractors to avoid paying federal payroll
taxes.
What happens when workers are considered independent contractors?
Employers
don’t have to pay various taxes, including unemployment insurance
taxes, workers’ compensation premiums or the employer’s share of Social
Security and Medicare taxes. Workers also may have fewer rights,
including overtime protections.
Employers accepted into a new IRS
program must cough up a bit more than 1 percent of the wages paid to the
workers for the past year. The IRS says no interest or penalties will
be due, and employers will not be audited on payroll taxes related to
these workers for earlier years.
The program only covers federal taxes.
Copyright 2011 The Associated Press.
WASHINGTON (AP) — The Internal Revenue Service is
offering a break to employers who come clean about wrongly classifying
workers as independent contractors to avoid paying federal payroll
taxes.
What happens when workers are considered independent contractors?
Employers
don’t have to pay various taxes, including unemployment insurance
taxes, workers’ compensation premiums or the employer’s share of Social
Security and Medicare taxes. Workers also may have fewer rights,
including overtime protections.
Employers accepted into a new IRS
program must cough up a bit more than 1 percent of the wages paid to the
workers for the past year. The IRS says no interest or penalties will
be due, and employers will not be audited on payroll taxes related to
these workers for earlier years.
The program only covers federal taxes.
Copyright 2011 The Associated Press.