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 Nevada? What are the requirements?

Based on the documents provided, it is not recommended to hire employees as independent contractors to save money on taxes in Nevada. Nevada law requires employers to pay certain taxes and provide certain benefits to employees, which may not be required for independent contractors. Employers who misclassify workers as independent contractors may be subject to penalties and fines. It is important to classify workers correctly as employees or independent contractors.

Requirements for Payment of Certain Taxes [1.1][4.1]

Employers who provide lodging services are required to pay taxes on the gross receipts from the rental of transient lodging. The taxes collected must be distributed to the Department of Taxation or the State Treasurer, depending on the type of tax, on or before the last day of the month immediately following the month for which the tax is collected. Employers must also provide a schedule for the payment of the tax in a sufficiently timely manner to carry out the provisions of the law. Employers are also required to pay an excise tax on each employer at the rate of 1.475 percent of the amount by which the sum of all the wages paid by the employer during a calendar quarter with respect to employment in connection with the business activities of the employer exceeds $50,000. Employers may subtract from the amount calculated a credit in an amount equal to 50 percent of the amount of the commerce tax paid by the employer pursuant to chapter 363C of NRS for the preceding taxable year.

Application by Employer for Designation as Payroll Provider [2.1]

Employers who provide payroll services for one or more members of an affiliated group and pay wages to employees who provide services on behalf of one or more members of the affiliated group are required to report and pay the tax imposed by NRS 363A.130 on wages paid to employees who provide services on behalf of one or more members of the affiliated group. Employers may apply to the Department to be designated as a payroll provider and may claim a tax credit against the excise tax imposed on the employer by NRS 363A.130 if they meet certain requirements.

Employer Required to Provide Verification of Matching Contribution with Quarterly Return [3.2]

Employers who claim a credit against the excise tax imposed on the employer by NRS 363B.110 must include with the quarterly return filed by the employer verification of a matching contribution made by the employer to the savings trust account of an employee of the employer or to the Nevada Higher Education Prepaid Trust Fund. Employers must also provide a list of all matching contributions made on a form prescribed by the Department.

“Private Employment Agency” Defined [6.1]

This document defines “private employment agency” as a person who facilitates employment between employers and employees. It does not include a person who facilitates business engagements between self-employed persons and their clients.

It is recommended to consult with a legal professional or the Nevada Department of Employment, Training and Rehabilitation for guidance on worker classification and tax requirements. Therefore, it is not recommended to hire employees as independent contractors to save money on taxes in Nevada.

In summary, employers in Nevada are required to pay certain taxes and provide certain benefits to employees, which may not be required for independent contractors. Employers who misclassify workers as independent contractors may be subject to penalties and fines. It is important to classify workers correctly as employees or independent contractors. Employers may apply to the Department to be designated as a payroll provider and may claim a tax credit against the excise tax imposed on the employer by NRS 363A.130 if they meet certain requirements. Employers who claim a credit against the excise tax imposed on the employer by NRS 363B.110 must include with the quarterly return filed by the employer verification of a matching contribution made by the employer to the savings trust account of an employee of the employer or to the Nevada Higher Education Prepaid Trust Fund.

Source(s):
Jurisdiction

Nevada