Abernathy Tax & Accounting CPAs and enrolled agents, Naperville, IL

Contractor or employee? A seven-question check

Answer yes or no about one person you pay. You get a leaning based on the three groups of facts the IRS looks at, the answers behind it, and what Illinois adds.

For general information only. The IRS and Illinois decide on all the facts of the working relationship. Nothing you answer leaves this page.

Behavioral control

1. Do you decide how, when or where the work is done, beyond saying what the finished result must be?

Yes leans employee.

2. Do you train them in your own methods or procedures?

Yes leans employee.

Financial control

3. Do they bring their own main tools or equipment and pay their own business expenses?

Yes leans contractor.

4. Do they sell the same service to other businesses or to the public?

Yes leans contractor.

5. Do they set a price for the job, so they could make or lose money on it?

Yes leans contractor.

Type of relationship

6. Do you give them benefits such as paid time off, health insurance or a retirement plan?

Yes leans employee.

7. Is the work an ongoing part of what your business sells, with no set end?

Yes leans employee.

Your result

Toward employee ()

None of your answers.

Toward contractor ()

None of your answers.

Illinois is stricter for unemployment insurance

The Illinois Department of Employment Security treats a worker as an employee unless the business can show all three parts of its ABC test: (A) free from your control, (B) work outside your usual business or away from all your places of business, and (C) their own established business.

Your answers suggest these parts may not be met: . For Illinois unemployment insurance, this person would likely count as an employee even if the IRS test came out the other way.

Your answers do not rule the test out, but the business has to prove each part, and this check does not ask where the work is done.

Construction work has its own Illinois test under the Employee Classification Act.

General information, not legal or tax advice. A short list of answers cannot settle a classification. Form SS-8 asks the IRS for a ruling, which takes six months or more.

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