The IRS considers all workers to be employees and only exceptions may be paid as an Independent Contractor
Employer-Employee Relationship
An employer-employee relationship exists when the payer (Stony Brook University) has the right to control and direct the individual worker not only as to the results of the work to be accomplished, but also as to the means and methods used to accomplish the work.
| Form | Description | More About the Form |
|---|---|---|
| FormForm 8233 | DescriptionExemption From Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual | More About the FormAbout Form 8233 |
| FormPrior Year Forms | DescriptionPrior Year Forms, Instructions & Publications Search | More About the FormPopular Prior Year Forms, Instructions & Publications |
| FormForm W-7 | DescriptionApplication for IRS Individual Taxpayer Identification Number (ITIN) | More About the FormAbout Form W-7 |
| FormForm W-8 BEN | DescriptionCertificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals) | More About the FormAbout Form W-8BEN |
| FormForm W-9 | DescriptionRequest for Taxpayer Identification Number and Certification | More About the FormAbout Form W-9 |
| FormAC 3237-S | DescriptionSubstitute Form W-9 (AC 3237-S) | More About the Form |
| FormHRSF0050 | DescriptionCert of Academic Activity B1, B2, Wb, WT Visa-SBF.RF.STATE | More About the Form |
| FormHRSF0053 | DescriptionCert of Academic Activity ABROAD - B1, B2, Wb, WT visa | More About the Form |
| FormHRSD0109 | DescriptionIndependent Contractor Tax Treaty | More About the Form |
Only Reimbursing Travel Expenses?
This information is to be used when paying a fee for service.
If only reimbursing travel expenses, use the Travel Voucher & Instructions on Procurement's
website.
Independent Contractors are...
Independent Contractors are generally individuals who follow an independent trade, business or profession in which they offer their services to the public and complete such services free of control or direction from the payer as to the means and methods used to complete the task. Under the Internal Revenue Service (IRS) general rules, an individual is an Independent Contractor (IC) if you, the payer, have the right to control the results of the work, not the means and methods.
Independent Contractors are NOT...
An individual who is already a Stony Brook University (State or Research Foundation) or a New York State employee may not be paid as an Independent Contractor. Employees who perform a task that is different from their regular duties, and after normal work hours, are eligible for overtime pay or Extra Service/Dual Employmentpay. An individual who is providing training or instructional service may be considered an employee.
Classifying a Worker
20 Factors of the Common Law Test
The IRS uses the 20 Factors of the Common Law Test to determine whether an individual is an employee or an IC. These 20 factors or 20 questions assist in determining if a relationship or evidence of control/right to control (behavioral and financial) exists between the payer and worker. Under IRS rules, anyone who performs services for you is your employee if you can control what will be done and how it will be done, even if freedom of action is granted to the individual worker.
Responsibilities of the...
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 Independent Contractor, the University must provide the individual with form 1099-MISC (Miscellaneous Income), when payment exceeds $600 for the year.
Independent Contractor
Independent contractors are responsible for reporting all income earned and paying applicable federal, state, city, and self-employment taxes.
It is illegal to knowingly classify an employee as an Independent Contractor
A worker may always be classified as an employee even if the worker meets the criteria of an Independent Contractor. However, it is illegal to knowingly classify an employee as an Independent Contractor in order to avoid Affirmative Action recruitment efforts and/or payment of employment taxes, fringe benefits, etc... The IRS imposes fines and penalties for misclassification of service. Liability 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.
ADDITIONAL IRS.GOV RESOURCES...
The IRS considers a worker to be an Independent Contractor if the person:
- Determines place and sequence of work.
- Is not trained (by the University) for the job.
- Possesses special skills or training.
- Provides a service not related to payer's normal business activities.
- Has the option to delegate work to others (not University employees).
- Employs own assistants.
- Works by the job.
- Sets own work hours.
- Generally works off-site.
- Can set own schedule (work flow).
- Files reports when job ends; interim reports possible (does not submit regular reports).
- Pays own business and travel expenses; part of job costs.
- Furnishes own tools and equipment.
- Has significant investment in facilities used.
- Can make a profit or suffer a loss if the project is not completed.
- Works for several companies at one time.
- Makes services available to the general public.
- Can not be fired if results satisfy the contract.
- Must complete job according to contract specifications.
The IRS considers a worker to be an employee if the person:
- Maintains a continuing relationship with the employer.
- Does the work personally (does not delegate work to non-employees).
- Is required to comply with instructions.
- Usually works Full-time for one employer.
- Is subject to dismissal.
- Can quit without incurring a liability.
- Is reimbursed for expenses.
- Is trained by the employer (or supervised).
- Provides services that are a key aspect of regular business (University) activities.
Only Looking to Reimburse Travel Expenses?
This information is to be used when paying a fee for service. If only reimbursing travel expenses, use the Travel Voucher & Instructions on the Procurement website.
Can you hire a former state employee?
| Former State Agency | Hiring Agency | 2 years since they left former agency? | Answer |
|---|---|---|---|
| Former State AgencyStony Brook | Hiring AgencyStony Brook | 2 years since they left former agency?It's been less than 2 years since they left their former agency. | AnswerFormer State employees are prohibited from appearing before their former agency for two years from their termination date, or the last date on the payroll. |
| Former State AgencyStony Brook | Hiring AgencyStony Brook | 2 years since they left former agency?It's been greater than 2 years since they left their former agency. | AnswerMust meet the IRS' Guidelines for an Independent Contractor. Participants in the Stony Brook Voluntary Separation Program may have limitations and should reach out to hrs_benefits@stonybrook.edu. |
| Former State AgencyNot Stony Brook | Hiring AgencyStony Brook | 2 years since they left former agency?It's been less than 2 years since they left their former agency. | AnswerMust meet the IRS' Guidelines for an Independent Contractor. Participants in the Stony Brook Voluntary Separation Program may have limitations and should reach out to hrs_benefits@stonybrook.edu. |
| Former State AgencyStony Brook | Hiring AgencyResearch Foundation | 2 years since they left former agency?It's been less than 2 years since they left their former agency. | AnswerThere's no law, rule or regulation that prohibits a former SUNY employee from joining the Research Foundation as an employee or working for them as an Independent Contractor provided the IRS' Guidelines for an Independent Contractor are met. This would include Graduate/Teaching Assistants who worked as State employees. Participants in the Stony Brook Voluntary Separation Program may have limitations and should reach out to hrs_benefits@stonybrook.edu. |
| Former State AgencyCurrentSUNY employee (Not Stony Brook) | Hiring AgencyStony Brook | 2 years since they left former agency?Currently Employed | AnswerCurrentSUNY employees cannot be hired as an Independent Contractor by another SUNY agency. However, they may be able to be paid through the Extra Serviceprocess. |
MORE QUESTIONS? Email hrs_independent_contractors@stonybrook.edu
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