Here's something that may help.
Posted By: for statutory employee. on 2005-12-20
In Reply to: Can someone please explain the - difference between IC and Statutory
Who is a Statutory Employee?
Statutory employees occupy a sort of middle ground between independent contractors and regular employees. They are workers in certain occupations who have been declared employees under the federal tax laws (statutes). These folks are not subject to any further tests or questioning by the IRS as to their status.
Employers must withhold Social Security and Medicare taxes on the income of statutory employees. These employees report their income and business expenses on Schedule C or C-EZ, although the employer also gives them a W-2 Form that reports this income and shows the payroll taxes that were withheld. Statutory employees must pay income taxes on their net income since their employers are not required to withhold income taxes from their pay.
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