Why Did I Receive a 1099 Form and Not an Employee W-2?

 

At tax time, employees should receive Form W-2 from their employer. If you’ve received a 1099 Form instead of an employee W-2, your company is treating you as a self-employed worker. This is also known as an independent contractor. When there is an amount shown on your Form 1099-MISC in Box 7, you’re typically considered self-employed.

Note: Starting in tax year 2020 (for forms furnished in 2021) you’ll receive new Form 1099-NEC for nonemployee compensation instead of Form 1099-MISC.

Review the Difference Between an Employee and Independent Contractor

When you are paid by your employer, the employer withholds taxes, which will be reflected on your W-2. When you are paid as a contractor, however, you’ll submit a W-9 to your client and you have to pay these on your own. You’ll receive a 1099 form instead of the employee W-2 form.

Three basic areas determine if you’re an employee:

  • Behavioral Control – Whether the business has a right to direct and control how your work is done
  • Financial Control – Whether the business pays your business expenses and buys your tools
  • Relationship of the Parties – Whether the business offers you benefits, such as insurance, vacation, or sick pay

What Should I Do If I Am Getting a 1099 Instead of a W-2?

If you are getting a 1099 form instead of a W-2 and think you should be classified as an employee, you should first contact your employer to be reclassified correctly. If the employer disagrees, you can have the IRS make the determination. You’ll need to file Form SS-8: Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding. You might also need to file a Form 8919: Uncollected Social Security and Medicare Tax on Wages to report and pay your share of these taxes.

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