Minnesota Voluntary Worker Classification Program
Posted 10-27-2011 | By Jared Weiskopf
The Minnesota Department of Revenue implemented a voluntary compliance program offering employers who misclassified workers as independent contractors the opportunity to correct the misclassification. The program is available through December 16, 2011. The benefits of the program include: waived penalties and interest; limited look-back period; and a 3% tax rate on compensation. This program follows the recently announced IRS settlement program; therefore, an employer may want to use both programs to receive the benefits at both the federal and state level.
Businesses must meet the following requirements to qualify:
- has consistently treated employees as independent contractors
- filed Forms 1099 for the independent contractors for the previous 3 years
- no disputes or examinations exist between the business and the IRS or the Minnesota Department of Revenue regarding the classification of workers
- is an active business with Minnesota employees
- agrees to register for Minnesota withholding tax
- identifies the misclassified workers and amount paid to them
- beginning January 1, 2012, agrees to treat the affected workers as employees, unless the relationship changes
- makes records available for verification.
Please contact Jared Weiskopf, CPA, at 651-407-5830 or jweiskopf@hlbtr.com if you have questions or would like more information about the Voluntary Classification Settlement Program.