IRS Publication 15A — Employer's Supplemental Tax Guide

1. Persons engaged in selling (or soliciting the sale of) consumer products in the home or place of business other than in a permanent retail establishment.

2. Persons engaged in selling (or soliciting the sale of) consumer products to any buyer on a buy-sell basis, a deposit-commission basis, or any similar basis prescribed by regulations, for resale in the home or at a place of business other than in a permanent retail establishment.

3. Persons engaged in the trade or business of delivering or distributing newspapers or shopping news (including any services directly related to such delivery or distribution).

Direct selling includes activities of individuals who attempt to increase direct sales activities of their direct sellers and who earn income based on the productivity of their direct sellers. Such activities include providing motivation and encouragement; imparting skills, knowledge, or experience; and recruiting.

Licensed real estate agents. This category includes individuals engaged in appraisal activities for real estate sales if they earn income based on sales or other output. 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. However, the companion sitter may be an employee of the individual for whom the sitting services are performed; see Pub. 926, Household Employer’s Tax Guide.

Misclassification of Employees Consequences of treating an employee as an independent contractor. If you classify an employee as an independent contractor and you have no reasonable basis for doing so, you’re liable for employment taxes for that worker, and the relief provision, discussed next, won’t apply. See section 2 of Pub. 15 for more information. Relief provision. If you have a reasonable basis for not treating a worker as an employee, you may be relieved from having to pay employment taxes for that worker. T o get this relief, you must file all required federal information returns on a basis consistent with your treatment of the worker. You (or your predecessor) must not have treated any worker holding a substantially similar position as an employee for any periods beginning after 1977. Technical service specialists. This relief provision doesn’t apply to a technical service specialist you provide to another business under an arrangement between you and the other business. A technical service specialist is an engineer, designer, drafter, computer programmer, systems analyst, or other similarly skilled worker engaged in a similar line of work.

This limit on the application of the rule doesn’t affect the determination of whether such workers are employees under the common-law rules. The common -law rules control whether the specialist is treated as an employee or an independent contractor. However, if you directly contract with a technical service specialist to provide services for your business and not for another business, you may still be entitled to the relief provision.

Test proctors and room supervisors. The consistent treatment requirement doesn’t apply to services performed after 2006 by an individual as a test proctor or room supervisor assisting in the administration of college entrance or placement examinations if the individual:

• Is performing the services for a section 501(c) organization exempt from tax under section 501(a) of the Code, and

• Isn’t otherwise treated as an employee of the organization for employment taxes. Voluntary Classification Settlement Program (VCSP). Employers who are currently treating their workers (or a class or group of workers) as independent contractors or other nonemployees and want to voluntarily reclassify their workers as employees for future tax periods may be eligible to participate in the VCSP if certain requirements are met. File Form 8952 to apply for the VCSP . For more information, go to IRS.gov/VCSP.

2. Employee or Independent Contractor?

An employer must generally withhold federal income taxes, withhold and pay over social security and Medicare taxes, and pay unemployment tax on wages paid to an employee. An employer doesn’t generally have to withhold or pay over any federal taxes on payments to independent contractors.

Common-Law Rules T o determine whether an individual is an employee or an independent contractor under the common -law rules, the relationship of the worker and the business must be examined. In any employee -independent contractor determination, all information that provides evidence of the degree of control and the degree of independence must be considered. Facts that provide evidence of the degree of control and independence fall into three categories: behavioral control, financial control, and the type of relationship of the parties. These facts are discussed next. 6 Publication 15-A (2026)