1099s for Non-Employees

[SunTaxMan]

I know the title sounds contradictory, but....

Client has no employees, but does have sub-contractors - legitimately classified. Experience tells me if the sub does not have insurance (or otherwise cannot provide a Certificate of Insurance), the issuer of the 1099 must include dollars paid in issuer's WC coverage.

How do you "include in WC" is there IS NO WC policy?

Thanks,

[GeneInAlabama]

Looks like the client will have to buy WC insurance to cover his sub contractors. I assume WC insurance can be bought to cover such situations. Client needs to check with his insurance company. The only other way to get around it is to require sub contractors to have insurance.

[Jack from Ohio]

Each state has different requirements for this situation. If he has not been compliant, he may be in for a lot of penalties!

Be sure of the requirement before you advise your client.

[mcb39]

Looks like the client will have to buy WC insurance to cover his sub contractors. I assume WC insurance can be bought to cover such situations. Client needs to check with his insurance company. The only other way to get around it is to require sub contractors to have insurance.

In Wisconsin, subcontractors have to carry their own WC insurance and show proof to the General. He then has to submit the proof to his WC carrier.

[Mr. Pencil]

How do you "include in WC" is there IS NO WC policy?

A 1099 should include the fair market value of anything provided, as well as cash payments. For insurance, use any reasonable method such as additional cost. I wouldn't be inclined to allocate a basic policy, because even if it covers work by subs it would only protect the general contractor. The sub would still be separately liable. What experience are you talking about in this matter?