According toUSCISan employer must complete Form I-9 whenever he hires someone to perform work or services in the United States in exchange for wages or other consideration. Consideration is anything of value given in exchange for work or services, including food and shelter. The requirement to complete Form I-9 applies to new employees hired in the United States after November 6, 1986.
Form I9 has not been completed for the following employees:
- Independent contractors; or
- Employed by a contractor who provides contract services (such as leasing employees or employment agencies) to your company (providing labor);
Are Form K1 and owners considered employees?K-1 employees are co-owners or partners in the business. These employees differ from W-2 and 1099 employees in several ways: (1) Partners file Schedule K-1 annually (Formulate 1065) to report income, deductions, profits, losses and other business-relevant transactions from the conduct of business; and (2) Partners do not normally receive oneW-2 formula. Income reported on a K-1 is not subject to income tax. Partners and shareholders are not considered employees. However, in rare cases, a spouse may receive both non-taxable income to report on a K-1 and taxable income to report on a W-2. In this situation, the partner receives taxable income and deductions using the normal accrual and withholding codes in the payroll system and is considered an employee of the company.
Indoor guidanceEmployer Handbook M-274, states that a self-employed person does not have to complete Form I-9 on his or her own behalfunlessthe person is also employed by a separate business entity, such as a corporation or partnership. In that case, the individual and any other employees must complete Form I-9. So business owners who are also employees of their own company must complete the form. If an individual is a business owner who actively provides services for a partnership or corporation (both separate entities) and receives payment in return, an I9 form must be completed.
