W-9 for Home Healthcare Providers (California) (California)

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W-9 for Home Healthcare Providers (California) (California)

Postby rosellavera on Sun Feb 26, 2012 11:31 pm

I notice that carriers ask lien claimants to provide a W-9 form from them prior to issuing payment. Why are lien claimants that provide home healthcare services exempt? If relatives of injured workers are filing lien claims for home healthcare services why are they not asked to produce a W-9? It seems to me that they should be given a 1099 at the end of the year so that they can file their income taxes unless I'm missing something that exempts them from claiming this income. A recent panel decision (Felix Mota v. Allgreen Landscape) held that the Immigration Reform and Control Act of 1986 did not bar EE's illegal alien wife from being paid for services rendered to her husband because the Board held that she was not defendant carrier's employee. An independent contractor paid by 1099 is not an employee per se of the carrier but if he/she is providing services for which payment is due the carrier should be able to issue a 1099 for the money paid for such services. I suspect that the defendant in the Mota case will file an appeal. If there is some exception to providers of home healthcare services I would appreciate a cite. Otherwise it does not make sense why they should be paid and not have to pay taxes for the wages earned, albeit as self-employed home healthcare providers.
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Re: W-9 for Home Healthcare Providers (California) (California)

Postby bcobb2350@yahoo.com on Fri Mar 09, 2012 4:49 pm

The W-9 issue has more to do with the IRS than the carriers. The IRS requires that an employer get a W-9 from every independant contractor. The 1099 information must be reported by every employer to the IRS. The IRS matches the 1099 information against the tax return the independant contractor files.

In some circumstances, the employer can be required to withhold up to 20% of all 1099 payments. If the employer fails to do things correctly, the IRS can force the employer to pay the 20% (plus penalties) and then work it out with the independant contractor (IC).

As you can imagine, once the employer has paid the IC, good luck clawing some of it back.

There is a ceiling of $600 before a 1099 is due. But, since an employer doesn't know for sure how much will be paid, it is always best to get the W-9 BEFORE any payments are made. That way, the employer is covered.

The employer isn't required to file a 1099 on corporations. But, the employer doesn't know if someone is actually a valid corporation or not. So, to protect themselves, the employer will issue a 1099 to everybody that gets a check that doesn't get a W-2.
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