How can I identify statutory employees?

You can identify independent contractors in the US as employees by statute.

For employees in multiple tax reporting units (TRUs) with different a statutory setting for each TRU, you must define separate tax cards for each TRU.

This status appears on W-2 Box 13.

To identify a person as a statutory employee:

1. Start the Calculation Entries task.

2. Search for the employee, and open their Tax Withholding card for editing.

3. Open the Federal component for editing.

4. In Withholding Exemption, select the appropriate status in Statutory Employee.

5. Save your work.

Note:

Statutory employees have no federal income tax (FIT) withheld. The payroll process still accumulates FIT wages and reports them in Box 1 of the W-2. For state income tax (SIT), the calculations follow the state's guidelines for tax withholding.