A 20 Points IRS Test!
A 20 Points IRS Test!
A 20 Points IRS Test!
A 20 point test was conducted by Gravity Care., Inc to bring more clarity in understanding the IRS requirements and determine work status of our caregivers registered on the Gravity Care mobile platform.
Caregivers are independent contractors (1099-MISC) when they register on our platform, they are NOT hired by Gravity Care, but on a temporary basis by care families therefore, Gravity Care is a marketplace to facilitate the interaction and members create a positive experience.
Answer “Yes” to all of the first four questions, means our caregivers are independent contractors; “Yes” to any of questions 5 through 20 means caregivers are probably an employee.
|Gravity Care Status||IRS 20 Points Checklist|
|Yes||1. Realization of profit or loss - Can the worker make a profit or suffer a loss as a result of the work, aside from the money earned from the project? (This should involve real economic risk-not just the risk of not getting paid.)|
|Yes||2. Investment in facilities. Does the worker have an investment in the equipment and facilities used to do the work? (The greater the investment, the more likely independent contractor status.).|
|Yes||3. Work for multiple companies. Does the person work for more than one company at a time? (This tends to indicate independent contractor status, but isn’t conclusive since employees can also work for more than one employer.)|
|Yes||4. Availability to public. Does the worker offer services to the general public?|
|No||5. Level of instruction. Do you have the right to give the worker instructions about when, where, and how to work? (This shows control over the worker.)|
|No||6. Amount of training. Do you train the worker to do the job in a particular way? (Independent contractors are already trained.)|
|No||7. A degree of business integration. Are the worker’s services so important to your business that they have become a necessary part of the business? (This may show that the worker is subject to your control.)|
|No||8.The extent of personal services. Companies that insist on a particular person performing the work assert a degree of control that suggests an employment relationship. In contrast, independent contractors typically are free to assign work to anyone.|
|No||9.Control of assistants. Do you hire, supervise, and pay the worker’s assistants? (Independent contractors hire and pay their own staff.|
|No||10.Continuity of relationship. Is there an ongoing relationship between the worker and yourself? (A relationship can be considered ongoing if services are performed frequently, but irregularly.)|
|No||11.The flexibility of schedule. Do you set the worker’s hours? (Independent contractors are masters of their own time.)|
|No||12.Demands for full-time work. Must the worker spend all of his or her time on your job? (Independent contractors choose when and where they will work.)|
|No||13.Need for on-site services. Requiring someone to work on company premises — particularly if the work can be performed elsewhere — indicates a possible employment relationship.|
|No||14.The sequence of work. If a company requires work to be performed in specific order or sequence, this control suggests an employment relationship.|
|No||15.Requirements for reports. If a worker regularly must provide written or oral reports on the status of a project, this arrangement indicates a possible employment relationship.|
|No||16.Method of payment. Do you pay the worker by hour, week, or month? (Independent contractors are generally paid by the job or commission, although by industry practice, some are paid by the hour.)|
|No||17.Payment of business or travel expenses. Do you pay the worker’s business or travel costs? (This tends to show control.)|
|No||18.Provision of tools and materials. Do you provide the worker with equipment, tools, or materials? (Independent contractors generally supply the materials for the job and use their own tools and equipment.)|
|No||19.Control over discharge. Can you fire the worker? (An independent contractor can’t be fired without subjecting you to the risk of breach of contract lawsuit. )|
|No||20.The right of termination. Most employees unilaterally can terminate their work for a company without liability. Independent contractors cannot terminate services without liability, except as allowed under their contracts.|