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  • Writer's pictureKristen Shields

Know This If You Applied for SBA Loan...

If you applied for an SBA loan and payroll assistance, whether you have been or will be approved or denied, you have submitted information that you've certified as true and correct to the authorities that be, including the IRS. While not negating the good or need in doing so, just know that you may have opened yourself up to additional scrutiny.

We all know there is a watchful eye on folks in construction from OSHA and Worker's Compensation investigators, but we don't ordinarily think of other agencies. We certainly don't think of possible effects of seeking financial assistance from the government during a health crisis.

Let's face it - in the construction industry, there is heavy designation of workers as 1099 independent contractors when really those workers are employees and should be classified as W2s. If, as a result of your application for financial assistance, the higher powers start poking around, just know that this is an area in which questions may arise.

Increased conversation has taken place in select states, like California, where stricter rules and regulations are being enacted governing classifications of workers as W2s or 1099s. Activity in those states is sparking a trickle effect to other states. Payroll companies, that answer to the IRS and prepare tax forms and financial documents for us, have to comply with these rules and regulations that are being issued. However, they still can give guidance in your classifications, ultimately following your direction and selections. A colleague in this realm who is a payroll specialist with one such company shared the following chart that serves as a quick glance and general guide that hopefully raises awareness of the distinctions between the categories. If you would like payroll assistance, feel free to contact Anna Cotten at (615) 618-7519 for more information - she can help all over the country. If you would like to strengthen your Subcontract Agreements to potentially help distinguish workers as 1099s, we can assist you - visit our Contact Us page!

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