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

Based on the documents provided, it is important to note that Utah has specific rules and regulations regarding the classification of employees and independent contractors. Employers cannot simply hire employees as independent contractors to save money on taxes.

Requirements for Independent Contractors in Utah

According to UTAC R994-204-301, an independent contractor is a worker who is customarily engaged in an independently established trade, occupation, profession, or business of the same nature as the services performed, and the individual providing the services must be free from the employer’s control and direction while performing services for the employer. A worker must clearly establish the worker’s status as an independent contractor by taking steps that demonstrate independence and indicating an informed business decision has been made.

Consequences of Misclassification

If an employer misclassifies an employee as an independent contractor, they may be subject to penalties and fines. According to UTAC R865-9i-51, the holder of a withholding tax license shall be responsible for any withholding tax, interest, and penalties incurred under that license whether those taxes and fees are incurred during the time the license is valid or invalid.

Conclusion

In conclusion, employers in Utah cannot simply hire employees as independent contractors to save money on taxes. There are specific requirements that must be met to classify a worker as an independent contractor, and misclassification can result in penalties and fines.

Jurisdiction

Utah

• Privacy