With the end of the calendar year rapidly approaching, the question resurfaces whether election workers should be issued a Form 1099 MISC or Form W-2.To answer the frequent question of how election workers’ payments should be treated, it is necessary to determine whether an election worker is an employee or contract laborer.
| Wages (in $) | W-2 | FICA |
|---|---|---|
| 1 - 599 | not required | not required |
| 600 - 1299 | required | not required |
| 1300 or more | required | required |
According to the IRS, election workers are temporary employees.They should be classified as employees since they do not meet the requirements for independent contract labor.
Election workers earning $1,300 or more for the 2006 calendar year are subject to FICA (Federal Insurance Contribution Act) tax. Payments of $600 or more paid to these employees are reported on Form W-2 and not Form 1099 MISC, Miscellaneous Income.However, wages of an election worker are not subject to federal income tax withholding. Consequently, there is no need to complete a form W-4 if the election compensation is the only type payment made to the individuals.Revenue Ruling 2000-6 gives examples of situations involving wages paid to election workers.
Additionally, the full tax of 7.65% of the gross amount earned must be paid by the employee and the employer if the employee earns $1300 or more.The Secretary of State’s office advises if there is any doubt the worker will meet the $1,300 limit, counties should not take an up front deduction on the social security.This will prevent FICA deductions from being paid unnecessarily.If the employer chooses not to begin withholding until after the worker earns $1,300, the county could recover the employee’s share of FICA from the employee by withholding from future earnings or by other arrangements made with the employee within the same calendar year.However, the IRS states that the employer will be liable for total taxes due if the employer chooses not to begin withholding until after the worker earns $1,300 and does not recover the employee’s share of FICA.
For more information contact Julie Marks, County Fiscal Analyst, at 800-456-5974 or via email to JulieM@county.org.