Responsibilities of Contracting Department & Independent Contractor

Responsibilities of Contracting Department
It is the responsibility of the contracting department to ensure compliance with IRS guidelines with respect to classifying a worker.
When issuing payment to an IC, the University must provide the individual with form 1099-MISC (Miscellaneous Income), when payment exceeds $600 for the year.
Liability for classifying an employee as an independent contractor may include payment for:
  • Employer's share of Social Security and Medicare taxes.
  • Employee's share of Social Security and Medicare taxes.
  • Unemployment taxes.
  • Interest on money found to be owed.
  • Civil fines.
  • If found to be a criminal matter, possible imprisonment.
Responsibilities of Independent Contractor
Independent contractors are responsible for reporting all income earned and paying applicable federal, state, city, and self-employment taxes.