Florida businesses will now be required to submit new hire information for independent contractors to the Florida Department of Revenue. This went into effect Oct. 1, 2021. Existing law previously required reporting of employee new hires, and this new law expands the reporting to independent contractors.

Under the law, employers and now “service recipients” are required to:

• Report new hires of employees and independent contractors to the State Directory of New Hires, Florida Child Support Services Program
• Reflect payments in an amount of $600 or more per calendar year for services rendered in the course of a trade or business
• The report must include the name, address, and social security number or other identifying number, and dates of services of the independent contractor along with the name, address, and federal employer identification number of the service recipient 
• It must also be filed within 20 days after the earlier of either the date of the first payment or the date on which the contract was entered into

A limited exemption exists from this new reporting requirement for employees and independent contractors working for or under contract with a federal or state agency in the intelligence or counterintelligence space, where reporting this information would endanger the safety of the worker or compromise an ongoing investigation.

The report may be submitted by mail, fax, or through an online reporting tool.  The new law is codified at F.S. 409.2576.

What does CohnReznick think?

The issue of proper worker classification is an increasing area of concern among both state and federal tax and labor enforcement authorities. First, Florida businesses hiring independent contractors should survey their use of independent contractors to determine whether they will meet the $600 reporting threshold to comply with the new law. Second, businesses should evaluate their workforce to ensure proper worker classification status to mitigate potential audit risk as well as bolster documentation to support worker classification determinations.

Contact

Corey L. Rosenthal, Practice Leader, State & Local Tax Services

646.625.5729

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