The University Record, February 13, 1995

New form needed for payments to independent contractors

From the Payroll Office

In 1992, the Internal Revenue Service began an Employee Tax Audit in which one of the issues was the appropriate classification of independent contractors vs. employees. During the audit, it became apparent that the University needed to move away from the determination of the individual's status being made centrally in the Faculty and Staff Records Office to being made by the department that initiates the Form G, Form G-1 and Form G-2.

A new Form GQ was developed to serve as U-M's customized version of the IRS's "20 Questions" document. The completion of the Form GQ will determine whether an individual should be classified as an independent contractor or as an employee. The status is then used to appropriately tax the payment made to the individual.

Effective March 1, Form GQ should be completed as a worksheet each time a payment for services is processed using a Form G, Form G-1 or Form G-2. The purpose of the Form GQ is to provide central documentation regarding services rendered for each individual paid as an independent contractor at the Univer-sity of Michigan.

Training sessions on the new form will be held as follows:

• Feb. 20, 9-11 a.m., Assembly Hall, 4th floor Rackham Building

• Feb. 23, 9-11 a.m., Assembly Hall, 4th floor Rackham Building

• March 1, 1:30-3:30 p.m. Fair Lane Estate, Dearborn Campus

• Feb. 28, 1-3 p.m., Flint Campus

Those with questions on the completion and processing of the new Form GQ should contact Sue MacDavitt in the Faculty and Staff Records Office (747-0012) or Norel Tullier in the Payroll Office (764-9518).