Work at home independent contactor classification by the IRS.

Generally speaking, if you work at home it is your employer who will determine the legal classification of your job. Most often, if you work at home you will be given an agreement to sign outlining the terms and conditions of your employment. Such agreements cover such things as property that will be used for the telecommuting job, who will pay taxes, what benefits are or are not available, etc.

The Internal Revenue Service has rules about how it classifies employees into four (4) categories:

Independent Contractor
Common-Law (regular) employee
Statuatory Employee
Statutory Nonemployee

The latter two categories relate mostly to specific types of jobs. They may or may not relate to your particular job.

The IRS does not have separate classifications for workers who perform work from their homes and working at home does not, in itself, determine which classification will apply to a specific job, but the fact that a job is done at home, especially if using property belonging to the individual doing the work (instead of the company), are important facts that may be considered.

The simple fact that you work from your own home does not in itself cause your job to be classified as an independent contractor position.

The IRS considers facts that fall into three categories related to how much control an employer has over its workers or employees, including virtual, remote, off-site or home-based employees: Behavioral Control, Financial Control and the Type of Relationship itself. As a general rule, the less control your employer has over you and the more control and independence you yourself have over your work at home job, the more likely it will be that you work at home as an independent contractor instead of a regular employee.

More information is also available.

The Internal Revenue Service also publishes additional information at its website (irs.gov) for people interested in more information about tax laws and guidelines concerning independent contractor status.

IRS Rules about Employee versus Independent Contractor Status