My husband is a contractor and he received a 1099 misc. The company that he contracts for deducts a percentage for workmans compensation. Does this dollar amount need to be included in his income tax return.
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Anonymous
ANSWERS: 1
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I have never heard of that kind of arrangement -- a 1099 contractor is normally responsible for all of their own taxes, Social Security, etc... if they're withholding anything like workman's comp, that would be very risky on their part -- it signals that they consider him to be an employee. That could trigger problems with the IRS. In any case, workman's comp payments are not income to the employee, they're an expense to the employer, so there's nothing for him to do. He should just report the net amount earned.
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