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.