Senate Tax Bill Does Not Contain Amendments Affecting Independent-Contractor Status

The U.S. Senate, on December 2, passed its version of the Tax Cuts and Jobs Act, (Senate tax reform bill) by a vote of 51-49. Click Here for a copy of the bill text.

Importantly, the bill does not appear to contain provisions from two amendments that reportedly were intended to be offered, which would have affected independent-contractor relationships.

One such amendment  would have repealed Section 530 of the Revenue Act of 1978.

The other amendment would have incorporated into the tax bill provisions of the NEW GIG Act of 2017, introduced as S. 1549 and H.R. 4165. While well intended, the NEW GIG Act of 2017 would create a new safe-harbor protection for independent-contractor relationships that undermines a bedrock tax distinction between independent contractors and employees, by requiring a taxpayer to withhold federal taxes from payments to independent contractors as a condition to qualifying for the safe harbor. Click Here for a summary of the bill.

As Congress continues to work on the Tax Cuts and Jobs Act, we will keep you updated of any developments affecting independent-contractor relationships.

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