Statutory Employee

Statutory Employee

Statutory Employee means:
an individual who is not an employee under common law rules but falls into one of the following categories:

• an agent or commissioned driver.

• a full-time life insurance salesperson.

• an individual who works at home with materials or goods and specifications provided by the “employer”.

• a full-time outside salesperson.

The “employer” is required to withhold Social Security and Medicare taxes for the above-listed individuals if:

1. the services are to be performed personally by them, 2. they have little or no investment in the equipment and property used (except transportation), and.

3. the services are performed on a continuing basis.

See also common-law employee; employee.

Description and Definition of Statutory Employee

Certain employees may report income and expenses as a business on Schedule C rather than as a miscellaneous itemized deduction on Schedule A subject to the 2 percent limitation. Examples of such employees are full-time life insurance salespersons and traveling salespersons.

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