What Is Form SS-8? The Ultimate Guide (2024)

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The IRS Form SS-8 is a form you can file to request a determination of the worker’s status for the purposes of federal employment taxes and income tax withholding. This determination will classify the worker as either an employee or an independent contractor. Once the decision is made, it will be binding.

IRS Form SS-8 can be filed by workers and businesses who want the IRS to determine the worker status for the purposes of federal employment taxes and income tax withholding. This form is designed to help the IRS determine the nature of an existing relationship between the employer and the worker.

It shouldn’t be used to describe hypothetical situations or proposed transactions, as the IRS doesn’t issue determination letters in such cases.

What is the procedure for filing the SS-8 form?

Find the Form on the IRS Website

You can find Form SS-8 on the IRS website.

You can fill it out online and then print it or print it first and then fill it out. To file Form SS-8 for the initial request of determination, you must mail it to the IRS, so you’ll need to have a physical copy completed and signed. Electronic versions are not acceptable.

Elements of Form SS-8

Form SS-8 is a four-page form with five sections:

• Part I: General Information. Questions designed to establish the background of the relationship between the worker and the employer.
• Part II: Behavioral Control. Questions intended to assess how the worker completes the tasks they have been hired to do and what is expected of them by the employer.
• Part III: Financial Control. Questions designed to establish what is provided by the worker and what is provided by the employer, how the worker is compensated for the work they do and what financial risks the worker can incur beyond losing their salary.
• Part IV: Relationship of the Worker and Firm. Questions designed to establish what is the nature of the relationship between the worker and the employer.
• Part V: For Service Providers or Salespersons. Questions designed to establish what the worker does in their capacity as a service provider or a salesperson who works directly with customers. You only need to fill out this section if the worker in question works in such a role.

Each section includes 10 to 13 questions, so filling out this form might take a while.

Note that you’ll need to attach copies of all supporting documentation for the claims you make in Part I. That might include contracts, invoices, W-2 or 1099-MISC forms and other relevant documentation.

Send the Completed Form

You need to mail the completed and signed form to:
Internal Revenue Service
Form SS-8 Determinations
P.O. Box 630
Stop 631
Holtsville, NY 11742-0630

There’s no other way to file the initial request to determine a worker’s status.

Once the IRS receives Form SS-8, it will acknowledge that and begin the process of determining whether the worker is an employee or an independent contractor. The IRS will attempt to get information from all parties involved by sending them blank Forms SS-8 for completion.

The case will then be assigned to a technician who may ask for additional information from the involved parties. They may also contact third parties and request information if they believe it would help clarify the relationship between the worker and the employer.

Remember that the Form SS-8 determination process doesn’t constitute an audit of any federal tax return. Consequently, the appeal rights available in case of such an audit do not apply to Form SS-8 determination.

Once the IRS reaches a decision, you’ll get one of these three letters:

• A determination letter that determines the worker’s status. Typically, the IRS issues it to the employer, then sends a copy to the worker. This letter is binding.
• An information letter intended to help the worker fulfill their federal tax obligations. This letter is only advisory, not binding.
• A courtesy letter the worker can rely on to fulfill their federal tax obligations. These are issued under very limited circ*mstances, though.

What happens if the IRS determines that the worker you’ve classified as an independent contractor is, in fact, an employee? In that case, you may be liable for unpaid wages, unpaid employment taxes and even penalties.

However, you might also be eligible for Section 530 relief, which provides businesses with relief from federal employment tax obligations if they meet these three statutory requirements:

1. Reporting consistency. In the past, you have filed the requisite information returns consistent with your treatment of the worker as a non-employee on time.
2. Substantive consistency. If you or your predecessor have treated this worker or any worker holding a similar position as an employee at any time after December 31, 1977, you won’t be eligible for relief.
3. Reasonable basis. You must show that you have reasonably relied on one of the three “safe harbors” (prior audit, judicial precedent, industry practice) to classify this worker as a non-employee. Note that this only applies to the time during which the employment decision in question has been made. Ex post facto justifications are not acceptable.

If you can’t meet these three statutory requirements, you’ll likely have to pay employment taxes that you owe to the IRS and unpaid wages that you owe to the employee you have misclassified as an independent contractor.

You’ll also be obligated to treat that worker as an employee and withhold taxes, including payroll and income taxes, from their pay and match their Social Security and Medicare contributions.

Mistakenly classifying an employee as an independent contractor can get you in trouble with the IRS. You may be held liable for unpaid federal employment taxes.

SS-8 forms are important because they enable you to request the IRS to determine whether the worker in question is an employee or an individual contractor so that you can be sure their worker’s status is correct.

Form 8919 is a form that employees treated as independent contractors can use to report their share of uncollected Social Security and Medicare taxes. They need to provide one of these reason codes for each company they mention in Form 8919:

• Reason code A. They have filed Form SS-8 and received a determination letter stating that they are an employee of the company in question.
• Reason code C. They have received correspondence from the IRS stating that they are an employee.
• Reason code G. They have filed Form SS-8 with the IRS and haven’t received a reply.
• Reason code H. They have received a Form W-2 and a Form 1099-MISC and/or 1099-NEC from this company in 2022 and the amount on Form 1099-MISC and/or 1099-NEC should have been included as wages on Form W-2. They don’t need to file Form SS-8 if they select this option.

Alternatively, if none of these reasons apply to the worker, but they nevertheless believe that they should have been treated as an employee, they can use the reason code G and then file Form SS-8 on or before the date they file their tax return.

Bottom Line

Classifying workers correctly is essential because incorrect classification can get you in trouble with the IRS. If you aren’t sure whether a worker is an employee or an individual contractor, you can file Form SS-8 to request the IRS to determine that.