Tuesday, September 11, 2018

Qualification and Mapping to W-2 of a Qualified Statutory Employee

Per the IRS website article entitled "Who Is a Statutory Employee? (Last Updated: August 3, 2017)":


"Some workers are deemed to be employees by statute. For an exempt organization, the most common employees in this category are its officers. In addition, while not as prevalent in an exempt organization, the following workers are also statutory employees:


  • A full-time travelling or city salesperson who solicits orders from wholesalers, restaurants, or similar establishments on behalf of a principal. The merchandise sold must be for resale (e.g., food sold to a restaurant) or for supplies used in the buyer's business;
  • A full-time life insurance agent whose principal business activity is selling life insurance and/or annuity contracts for one life insurance company;
  • An agent-driver or commission-driver engaged in distributing meat, vegetables, bakery goods, beverages (other than milk), or laundry or dry cleaning services; and
  • A home worker performing work on material or goods furnished by the employer.

An employer should indicate on the worker's Form W-2 whether the worker (other than a corporate officer) is classified as a statutory employee. Non-officer statutory employees report their wages, income, and allowable expenses on Schedule C (or Schedule C-EZ), Form 1040. They are not liable for self-employment tax because their employers must treat them as employees for social security tax purposes.

To Reflect in the Employees' Form W-2 that they are Statutory:

         Premier Payroll: Especially those who uses the Service-Printed feature with Ceridian, customers would have to contact support to ask Ceridian in marking the employee as a statutory employee.
  • Note that tax exemptions of the statutory employees would have to be manually set in their corresponding employee records in NetSuite so their W-2 amounts are correct aside from having Box 13 marked.

Note: Employee type found on the Human Resources tab of the employee record is for descriptive and reporting purposes only and not related to payroll. Field level and Help Guide had been updated to remove "for tax reporting purposes" (see Issue 141634).

No comments:

Post a Comment