A new twist on paying homeschool co-op teachers

I frequently advise homeschool co-ops to be careful how they pay teachers.  I think it is best to treat paid teachers as employees or to have the parents in the co-op pay the teachers directly. In general I recommend homeschool co-ops avoid paying teachers as independent contractors from the co-op’s checking account.

See my other posts on the issue of paying teachers in a homeschool co-op

Is Your Hired Teacher Really an Employee?

Update on Teachers as Independent Contractors

JoAnn from Texas told me recently how her co-op pays teachers. It’s a new twist that I like and I believe the IRS would approve also.

The teachers in JoAnn’s homeschool co-op invoice the co-op for their services.

The co-op collects all the money from the families and pays the teachers’ invoices, rent and other necessary expense. Each  teacher creates a bill for the amount the co-op owes him or her for teaching.  The co-op provides 1099MISC forms to any teacher paid over $600 annually.

This makes the role of the teachers as independent contractors, and not as an employees of the co-op, very clear. One of the hallmarks of independent contractors is that they bill for their services and do not receive hourly wages or a salary.

This might be a system your co-op could adopt. Thanks JoAnn for sharing your idea!

PayingWorkersCoverMy ebook Paying Workers in a Homeschool Organization covers paying workers as employees or independent contractors.  It includes sample forms, tips and advice to help you pay workers in accordance with the IRS laws to help your organization pay their workers correctly. Written specifically for homeschool organizations.

Price: $7.00

Available for immediate download as a pdf file

Click Here to Purchase

Carol Topp, CPA


  1. Debbie says:

    I have a couple of questions about the invoicing. First, would it still be advisable to have an independent contractor contract for each teacher? Second, would the funds deposited into the homeschooling group’s account count toward the $5000 gross max. of an unincorporated non-profit? We are beginning a homeschool group and have found your site immensely helpful! Thanks so much.

  2. Carol Topp says:

    The answer to both questions is Yes. It is advisable to have a contract with each IC teacher in your group. And yes, the income collected and deposited into the group’s checking account counts toward gross income.

    FYI, Debbie is referring to a $5,000 threshold established by the IRS for exemption from applying for 501c3 tax exempt status. Small nonprofits (gross annual revenues under $5,000) mat be considered tax exempt and are exempted from filing the IRS application, Form 1023.

  3. Hi Carol, Our co-op is a nonprofit corporation. Almost all of our tutors in the co-op are moms with kids in the program. The moms do not get pay in money for teaching but are offered “credits” against tution. 1) Are we correct to assume that we are not dealing with either IC or employees in this circumstance? 2) We have one tutor who gets “credits” and payment., can we regard her as an IC if she submit an invoice as suggested above? 3) We have a man from the church where we meet who helps with setup of chairs in the lunchroom. He works at the church. We “pay” him as a way to thank him for the extra effort. How would you classify that? 4) We do have a few tutors whom we pay and we will need to look more closely into invoices and 1099 MISC.

    Thank you so much for your advice. If these questions are covered in your ebook, please let me know.

  4. Carol Topp says:

    Dear MG,
    1. Sounds like your tutors are volunteers. You thank them with tuition discounts (or credits as you call them). The more a person volunteers, the larger the discount/credit. There is no problem with doing that.

    2. Paying a volunteer gets very tricky. She’s no longer a volunteer because she is paid. She’s actually a mix; some volunteer and some paid. That’s what’s confusing. If you can clearly separate her volunteering and the discounts/credits from her paid tasks, then do that. For example, if she tutors and gets credits and then in addition designs your website for pay, it’s pretty easy to separate those two jobs.

    3. Sounds like the janitor is an Independent contractor hired for a specific job.

    My book, Money Management in a Homeschool Organization will be helpful and so will the Paying Workers in a Homeschool Organization ebook, because it show the forms needed for ICs.

  5. Thank you, Carol!! You are most helpful. I really appreciate what you have to offer through your website and your private consultation.

  6. I don’t think the IRS would give a green light on the invoicing.

    1. If the teachers are only invoicing one client, the IRS generally will not consider the teacher as “being in business”.

    2. The co-op is dictating the time and place the teachers will preform their services.

    3. By issuing 1099’s, you are adding an extra area of scrutiny that the IRS may look at.

    IMO, I like the idea of the parents paying the teachers directly.

    Kenneth Hoffman, EA

  7. Carol Topp says:

    Kenneth, Thank you for your opinion. There are many factors that go into the distinction between employee and independent contractor. You cited a few of the factors to consider.

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