401-4 - Resource - Income Received From a Business

Self Employment Medical

Posting Income from an S Corp, LLC or Limited Partner

Self Employment tool

1099-MISC, Independent Contractors, and Self-employed

If payment for services provided is listed in box 7 of the Form 1099-MISC, it may be an indicator that a client could be considered self-employed or an independent contractor.

• The client does not necessarily have to "have a business," but simply perform services as a non-employee to have compensation treated this way.

• The payer has determined that an employer-employee relationship does not exist in these cases.

• That determination is complex, but is essentially made by examining the right to control how, when, and where the independent contractor performs those services.

• It is not based on how the client is paid, how often they are paid, nor whether they work part-time or full-time.

NOTE: Not all income listed on Form 1099-MISC is earned income. Many types of unearned income such as winnings and prizes are also reported on forms 1099-MISC. For more information see this IRS site.