The Almighty SS8

My boss fired me because their old nanny returned to town. I had been working for six months, incident free. Problem, I had been working off the books. So I was terminated and have nothing to show for it. This is so wrong. What do nannies do in this situation?

We advise nannies and employer to talk about taxes before work starts, to file appropriate tax documents and to pay their nannies legally (and fairly). Having said that, we hear from a lot of nannies that seem to have issues with the IRS because their employer would not pay them on the books or tried to pass them off as an independent contractor.

If you have a dispute with your employer over pay or taxes, it is helpful to have the conversation, in writing, whenever possible. If the situation cannot be resolved, each person must do the legal and correct thing for their own protection.

Kidding. Of course.
IRS Form SS-8 Request for Determination of Worker Status
Form SS-8 is used to request a determination from the IRS on status of workers, to determine if they are employees or independent contractors. The key areas used to determine worker status are: behavioral control, financial control, and type of relationship.

Here is a list of key information you will need to compile in order to complete this form:

  • How did the worker obtain the job (bid, application, employment agency, or other
  • Description of the work done by the worker
  • Explanation of why you believe the worker is an employee or independent contractor
  • Attach a copy of any written agreement

Specific questions to determine behavioral control; for example:
  • Training and instructions 
  • Work assignments 
  • Problems and complaints 
  • Daily routine 
  • Substitutes or helpers
Specific questions to determine financial control; for example:

  • Who provides supplies and materials
  • Who provides leased equipment
  • Are worker expenses reimbursed
  • Type of pay received (salary, commission, hourly wage, piece work, lump sum, or other Drawing/advance account
  • Who does the customer pay
  • Economic loss/financial risk for worker

Specific questions to determine relationship of worker and firm; for example:

  • Benefits available to worker, like paid vacations, sick pay, pensions, bonuses, insurance 
  • Penalties for termination of relationship 
  • Presence of non-compete agreement 
  • Is worker in a union 
  • Who provides materials, patterns, instructions 
  • How the firm represents the worker to its customers

The Process A worker or employer can file Form SS-8 and receive a determination from the IRS. When the IRS receives the request, it will begin research and may come back to the firm and worker for further information. At the end of the process (which might take up to six months) the IRS will either (a) issue a determination letter, which is binding on the IRS, or (b) issue an informational letter, which is advisory but not binding.

Where to find the SS8 Form

Where To File
Send the completed and signed Form SS-8 to:

Internal Revenue Service
Form SS-8 Determinations
P.O. Box 630
Stop 631
Holtsville, NY 11742-0630

Faxed, photocopied, or electronic versions of Form SS-8 are not acceptable for the initial request for the Form SS-8 determination. Do not submit Form SS-8 with your tax return as that will delay processing time.

Tax questions, rants, dilemmas or advice? Email isynblog@gmail.com.

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