The IRS classifies only four different categories of an employee who can be considered statutory: A driver who distributes beverages (other than milk) or meat, vegetable, fruit, or bakery products; or who picks up and delivers laundry or dry cleaning, if the driver is your agent or is paid on commission.

What is statutory classification?

In California, a statutory employee is a worker who is classified as an employee, rather than as an independent contractor, by statute. If a worker is a statutory employee, they have more legal protections, but their employer has to withhold certain taxes from their paycheck.

How is a statutory employee different from an employee?

A statutory employee is a person in business as a separate company from the hiring company. But a statutory employee is treated as an employee for employment tax purposes. So a statutory employee is a cross between an independent contractor and an employee.

Who is a statutory employee of the IRS?

“Statutory” refers to the Internal Revenue Service (IRS) classification of workers who are subject to tax withholding by statute under its common law rules. A statutory employee is an independent contractor who is considered an employee for tax withholding purposes if they meet certain conditions.

How does a statutory employee file a Schedule C?

The employer provides the statutory employee NOT with a 1099-MISC, but with a Form W-2 that has the “Statutory Employee” option checked in Box 13. Then, the statutory employee files a Schedule C as an independent contractor, which means he or she may deduct business expenses (including mileage expenses) and may have a business profit or loss.

Can a companion sitter be a statutory employee?

Companion sitters who aren’t employed by a service are also considered to be self-employed. For workers who qualify as statutory employees, the tax situation may be confusing, but it has benefits. Basically, for tax purposes, a statutory employee: