Proper Employment Tax Treatment of Part-Time or Seasonal Workers

Courtesy of the Internal Revenue Service

June 04, 2009

For many businesses, summer traditionally brings an influx of part time or seasonal workers into the work force. Employers must ensure they are treating these workers properly for employment tax purposes.

Generally, workers are either employees or independent contractors, based upon the facts and circumstances of the relationship between the business and the worker.

For federal income tax withholding, Social Security, Medicare, and federal unemployment tax purposes, neither the number of hours worked nor amount earned alone determines the status of an individual as independent contractor or employee. For example, an individual can be an employee even though the individual works one hour a week or one day a year.

Furthermore, businesses must remember that part-time or seasonal workers who are employees are subject to the same tax withholding rules that apply to other employees.

Employers who only hire seasonal workers and do not have payroll in each quarter of the year may check the box on line 19 of the Form 941 – “If you are a seasonal employer and you do not have to file a return for every quarter of the year.”

More information about treating these workers properly is on the Part Time or Seasonal Help Web page on IRS.gov. The page contains helpful tips for filing Form 941, Employer’s Quarterly Federal Tax Return, other information about seasonal/part-time workers and links to other resources to help businesses with employees.

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