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.

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