HomeWork Solutions: The Household Employee Experts

Elder Caregiver as Independent Contractor?

Posted by Kathleen Webb on Oct 9, 2012 4:58:00 PM

Many of HomeWork Solutions’ professional staff hold American Payroll Association (APA) professional accreditation. Regular professional education is a requirement to maintain credentials, and we receive many notices regarding webinars that help fulfill CPE credit requirements.

A current APA webinar offering is Employees v. Independent Contractors – How to Avoid Misclassification. The course description:

The IRS is really cracking down on finding and penalizing employers who improperly classify a worker as an independent contractor when he's really an employee. Don't let your clients get caught in the crossfire. Did you know that even if the worker agrees to be classified as an independent contractor, the IRS will not honor that agreement?

elder caregiver employeeIn general, a worker is presumed to be an employee except in situations where the family paying for services can demonstrate the worker's true independence. This means the employer must be able to prove that the worker performs services that the employer does not have the right to direct, the worker maintains an independent business enterprise with his/her own insurance, and that the services provided by the worker are outside the household’s usual course of business (ie. carpenters, roofers, etc.). Most household workers and elder caregivers who are paid directly by the household, or by a third party acting on behalf of the household, are employees and the employer is responsible for employment taxes, recordkeeping and required insurance matters. This is true of most elder caregivers you directly hire, and those senior caregivers you hire with the assistance of a registry service. Our free tip sheet: Privately Employed Home Caregiver Payroll can help you understand your tax and recordkeeping obligations.

More information from the Internal Revenue Service.

Topics: elder care, senior caregivers, worker misclassification independent contractor, household independent contractor

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