Is your homeschool group’s hired teacher really an employee?

A homeschool group faced an unpleasant audit by the IRS for misclassifying their co-op teachers as independent contractors.

A homeschool nonprofit was quite frantic.  They had received a letter from the IRS.  It seems that a former teacher of one of their classes  was asking for an examination of her status as an independent contractor (using IRS Form SS-8).  She thought that she should be classified as an employee of this homeschool nonprofit.  If the IRS agrees with this worker, the homeschool organization may have to pay back taxes (Social Security and Medicare) and perhaps penalties.

Fortunately this homeschool group did many things right:

  • They had all their paid teachers sign a Independent Contractor Agreement.
  • They did not control the content of the class, nor dictate to the teacher what curriculum she must use.
  • They offered no benefits to teachers.
  • They did not train their teachers.
  • They sent 1099-NEC to every Independent Contractor making more than $600 per calendar year.
  • The teachers had businesses teaching at other organizations and places.

But these are only a few of the factors to address in making a worker determination.

How about your homeschool group?  Would you pass an IRS examination?

Do your hired teachers sign an Independent Contractor agreement?

Do you avoid controlling their work as you might an employee? That might be more difficult than you think, since your homeschool a must control and direct the teacher since they are dealing directly with children. For the safety of the children, you organization must exert some direction and control over the teachers.

Here’s an IRS brochure regarding employee or independent contractor status (IRS Pub 1779).

My book Paying Workers in a Homeschool Organization explains in detail how to determine of your worker is an employee or an Independent Contractor.

Paying Workers in a Homeschool Organization covers paying workers as employees or independent contractors. There are also chapters on paying volunteers and board members. 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.



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