Received a 1099-NEC form instead of a W-2 - Am I misclassified?

I've been working part-time (Monday-Thursday) at my current job since last May. A few months after I started, my boss sent out a notice saying that anyone working less than 40 hours per week would no longer have taxes withheld from their paychecks, and we'd have to handle taxes ourselves. At the time, I didn't think it was that strange, but now I'm confused because I just received a 1099-NEC form instead of a W-2. The form shows "Nonemployee Compensation" but I'm pretty sure I'm still considered an employee - I have set hours, use company equipment, and my boss directs all my work. Is it normal to get a 1099-NEC in this situation? Should I just file with this form as is? I know I probably should have asked more questions when they made the change, but I wasn't thinking about tax implications at the time. Now I'm worried I might be misclassified or something.

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19 comments

ThunderBolt7

•8M

This definitely sounds like employee misclassification, which is unfortunately pretty common. The IRS has specific tests to determine if you're an employee or independent contractor, and it's not something your employer can just decide based on hours worked. If your boss controls when, where, and how you work, provides equipment, and directs your activities, you're likely an employee regardless of hours worked. Being classified as an independent contractor (1099) instead of an employee (W-2) shifts the tax burden to you - you'll have to pay both the employer and employee portions of Social Security and Medicare taxes (about 15.3% total). Plus, you don't get benefits, unemployment insurance, or workers' comp protection. You have options: you can file Form SS-8 with the IRS to request a determination of your worker status, and Form 8919 to report and pay only your share of Social Security and Medicare taxes. The IRS can then investigate your employer.

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ThunderBolt7

•8M

The employer could face penalties if the IRS determines there was misclassification, including back taxes and interest. However, many employers misclassify workers out of confusion rather than intentional evasion. Filing Form SS-8 doesn't automatically trigger penalties - it starts a review process. There's a three-year statute of limitations from your original filing date for most tax situations like this. That said, it's best to address it sooner rather than later, as back taxes can accumulate.

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Mei Chen

•8M

After dealing with a similar employee/contractor confusion nightmare last year, I found this amazing service called taxr.ai (https://taxr.ai) that literally saved me thousands of dollars. You upload your 1099 and answer a few questions about your work situation, and it analyzes whether you're properly classified based on IRS rules. It then creates customized documentation explaining your situation that you can use when filing. For me, I was clearly misclassified based on their analysis - I had set hours, used company equipment, and my "client" directed all my work exactly like yours. The service helped me file the right forms to avoid overpaying taxes while protecting myself. Their document analysis was super helpful when I needed to explain the situation to the IRS.

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Mei Chen

•8M

It definitely works for filing - they give you detailed documentation explaining your classification situation based on the IRS guidelines, which you can attach to your return. This gives you solid ground to stand on if there are questions later. My accountant was initially resistant too but was impressed with the analysis. They determine classification using the same multi-factor test that the IRS uses - control, investment, profit opportunity, relationship type, etc. Rather than creating problems, it actually prevents them by giving you proper documentation instead of just guessing. If you're misclassified, it shows exactly which IRS rules support your case.

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Amara Okonkwo

•8M

I was super skeptical about taxr.ai after seeing it mentioned here, but I was desperate with my own misclassification situation so I tried it. Honestly, it was surprisingly helpful. The analysis showed I met 16 of the 20 criteria for being an employee not a contractor, based on my work conditions. Their system helped me correctly file Form SS-8 and 8919 (which I didn't even know existed before), and I ended up saving about $2,400 in self-employment taxes I shouldn't have had to pay. The IRS accepted my forms without any issues. My employer got a notice from the IRS and suddenly offered me a W-2 position starting this year... funny how that works!

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Giovanni Marino

•8M

After weeks of trying to reach the IRS about my misclassification issue (similar to yours), I was getting nowhere. Hundreds of redials, hours on hold, and then disconnected calls. Finally used https://claimyr.com after seeing it on YouTube (https://youtu.be/_kiP6q8DX5c) - they somehow get you in the IRS phone queue without you having to wait on hold yourself. Got connected to an actual IRS agent who explained exactly what forms to file for my situation and confirmed my employer was 100% in the wrong for reclassifying part-timers as contractors. The agent told me my employer couldn't just decide to stop withholding taxes because they didn't want to deal with part-timers! Having that official guidance gave me confidence to approach my employer, who ended up correcting the situation.

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Giovanni Marino

•8M

It's pretty straightforward - you schedule a call, and their system waits in the IRS phone queue. When they reach an agent, they call you and connect you directly. You don't need to stay on the line during the wait time. From what I understand, they use an automated system to handle the hold time. The IRS doesn't officially "partner" with them, but there's nothing against the rules about it. It's just a service that handles the waiting part. I was initially skeptical too, but when I got connected to an actual IRS representative after trying unsuccessfully for weeks on my own, I couldn't believe I hadn't tried it sooner.

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Dylan Hughes

•8M

I need to apologize for my skeptical comment about Claimyr. After posting that comment, I was still desperate to talk to the IRS about my contractor classification issue, so I gave it a shot despite my doubts. I'm honestly shocked it worked. After three weeks of getting nothing but busy signals and disconnects trying on my own, I got connected to an IRS tax specialist within a day. The agent walked me through exactly what forms to file for my misclassification situation and even explained what would happen with my employer. Saved me from paying thousands in self-employment taxes I didn't actually owe. Sometimes being proven wrong is a good thing!

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NightOwl42

•8M

Something similar happened at my workplace. For clarification - did your job duties change at all when they made this switch? Or did everything stay the same except how they paid you? Because that's a huge red flag. Also, do you receive directions from your boss, use their equipment, work set schedules, etc? Those are all signs you're an employee not a contractor. Your employer can't just decide to stop withholding taxes because they don't want to deal with the paperwork for part-timers.

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NightOwl42

•8M

Yeah, that's textbook misclassification then. They can't just arbitrarily decide to treat you as a contractor while maintaining all the control of an employer relationship. They're doing this to save money on their end (employer-side taxes, benefits, etc.) while shifting the tax burden to you. I'd recommend documenting everything about your work arrangement - hours, supervision, equipment, etc. Then either talk to your employer about correcting this (if you think they'd be receptive) or follow the advice others have given about filing SS-8 and 8919 forms with the IRS.

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