Tax Compliance Guidelines - Independent Contractor Questionnaire


Any individual performing services for the university is presumed to be an employee unless they meet all of the independent contractor criteria established in policy FIN-ACC-630. The Independent Contractor Questionnaire collects information necessary to make this determination and is reviewed by University Tax Services. University Tax Services then determines if the individual should be paid as an employee using HRMS, IU's payroll system, or as a supplier using BUY.IU, IU's purchasing system.

Indiana University uses the services of individuals, including students, who are not treated as employees of the institution and also make other types of non-payroll payments, such as royalties, that must be reported on Form 1099-MISC to US taxpayers as “other reportable payments.” IU determines what is reportable on Form 1099-MISC by the object code applied to each payment. Tax has designated a list of object codes as reportable on the Form 1099-MISC. For the list of object codes visit Common Reportable Object Codes.

Part of Indiana University’s tax responsibility is obtaining a valid Taxpayer Identification Number (TIN) from the individual to whom the employer makes a “reportable payment.” The TIN is the Social Security number for individuals or an Employer Identification number for U.S. entities. If the individual does not provide a valid TIN or the IRS notifies the University that the payee’s TIN is missing or incorrect, the University must withhold at a designated rate from the individual’s payment (backup withholding) per IRC §3406(b)(2).

It also is required to solicit the payee for the correct information. University policy is to solicit the payee for a valid TIN using Form W-9

Reportable payments to non-US persons or corporations are reportable on Form 1042-S and have a different set of rules.

See IRS - IRC §3406(b)(2).