Ask Reggi Your Question Now

Reggi is the free generative AI assistance for regulatory compliance
Ask a Question

Can I hire employees as independent contractors to save money on taxes in Idaho? What are the requirements?

Requirements for Hiring Independent Contractors in Idaho

To hire employees as independent contractors in Idaho, the following requirements must be met:

  1. The worker must be free from the control and direction of the employer in connection with the performance of the work, both under the contract for the performance of the work and in fact.
  2. The worker must perform work that is outside the usual course of the hiring entity’s business.
  3. The worker must be customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.

If these requirements are not met, the worker may be considered an employee and not an independent contractor [1.1].

Consequences of Misclassifying Employees

Misclassifying employees as independent contractors can result in serious consequences for employers, including fines and penalties. Employers may also be required to pay back taxes, overtime pay, and other benefits to misclassified employees [1.1].

Additional Information

It is important to note that Idaho has specific laws and regulations regarding the classification of employees as independent contractors. To determine the suitability of prospective employees and contractors for the Idaho state tax commission, the human resources office of the commission shall require an applicant to provide information and fingerprints necessary to obtain criminal conviction history information from the Idaho state police and the federal bureau of investigation [2.1].

Furthermore, every contractor for the construction of public works by a contracting unit of this state shall contain substantially the following provisions: The contractor, in consideration of securing the business of erecting or constructing public works in this state, recognizing that the business in which he is engaged is of a transitory character, and that in the pursuit thereof, his property used therein may be without the state when taxes, excises, or license fees to which he is liable become payable, agrees to pay promptly when due all taxes, (other than on real property), excises and license fees due to the state, its subdivisions, and municipal and quasi-municipal corporations therein, accrued or accruing during the term of this contract, whether or not the same shall be payable at the end of such term [4.1].

It is also important to note that it is unlawful for any person to engage in the business of, or hold himself out as, a contractor within Idaho without being registered as required in this chapter [1.2].

Conclusion

It is important to carefully consider the requirements for hiring independent contractors in Idaho and to ensure that employees are properly classified to avoid legal and financial consequences.

Source(s):
Jurisdiction

Idaho