Work at home Contractor Rules and Guidelines, including IRS Guidelines
A work at home position will be more likely to be classified as an independent contractor position if:
1. The worker may have unreimbursed business expenses from the work at home job
2. The employer does not control how work is done, but rather only the end result that is delivered to the employer.
3. The Employer does not provide training to the work at home employee or contractor.
4. The person who works at home provides his/her own assets or property for use while performing his/her work at home job.
5. The risk of whether the work at home opportunity is independent... whether the worker can realize a profit or loss, hire others, control how work is done, and/or provide the same service to other employers.
6. There is a Work at home Contractors or other written Agreement governing the relationship.
7. The employer does not treat the contractor the same way it treats other non-contractor employees, such as by providing the same benefits and rules.
8. The work at home position is more like an individual project or contract position rather than a regular, permanent job.
The fact that a work at home worker uses his/her own property to do the work, utilizes his/her own methods for doing the work and works independently at home are all key considerations, in addition to many others, when making a determination concerning whether a work at home job is an independent contractor position or regular employee position.
The Internal Revenue Service has rules about how it classifies employees into four (4) categories: Independent Contractor, Common-Law (regular) employee, Statuatory Employee, Statutory Nonemployee.
The latter two categories relate mostly to specific types of jobs. They may or may not relate to your particular work at home job.
The IRS does not have separate classifications for workers who work at home and working at home does not, in itself, determine which classification will apply to a specific job, but the fact that a job is done at home, especially if using property belonging to the individual doing the work (instead of the company), are important facts that may be considered.
The simple fact that you work at home does not in itself cause your work at home job to be classified as an independent contractor position.
The IRS considers facts that fall into three categories related to how much control an employer has over its workers or employees, including work at home employees: Behavioral Control, Financial Control and the Type of Relationship itself. As a general rule, the less control your employer has over you and the more control and independence you yourself have over your work at home job, the more likely it will be that you work at home as an independent contractor instead of a regular employee.
Click here for work at home financial planning info.
Click here for list of basic differences between work at home contractors and employees.
Other websites that offer helpful information:
More information concerning work at home employees and independent contractors is also available from the Internal Revenue Service at irs.gov.
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