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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 7428
Experience:  15years with H & R Block. Divisional leader, Instructor
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I am changing my 1099 contractor to a w2 salary employee.

Customer Question

I am changing my 1099 contractor to a w2 salary employee. My company in in AZ and he is a California resident. What forms do I need to file with IRS and CA?
Submitted: 11 months ago.
Category: Tax
Expert:  Robin D. replied 11 months ago.

Robin D. :

Hello and thanks for trusting me to help you today. I am a tax adviser with over 15 years of experience.
Your new employee would need to complete a W4 to start with. This would be for the state where they are working and federal. You are required to get each employee's name and SSN and to enter them on Form W-2.
Federal law requires employers to verify an employee's eligibility to work in the United States. Within three days of hire, employers must complete Form I-9, employment eligibility verification, which requires employers to examine documents to confirm the employee's citizenship or eligibility to work in the U.S. Employers can only request documentation specified on the I-9 form.

Employers do not need to submit the I-9 form with the federal government but are required to keep them on file for three years after the date of hire or one year after the date of the employee's termination, whichever is later.

Employers can use information taken from the Form I-9 to electronically verify the employment eligibility of newly hired employees by registering with E-Verify.



Robin D. :

All businesses with employees are required to carry workers' compensation insurance coverage through a commercial carrier, on a self-insured basis or through their state’s Workers' Compensation Insurance program.

Robin D. :

I cannot speak directly to the state unless I know where the employee will be physically working. If in CA then you would need to withhold for CA purposes. If they are going to be physically working in Arizona then the Arizona rules for employees would apply.

Robin D. :

The State of California encourages multistate employers to report California employees to the California New Employee Registry. Reporting the information to California’s New Employee Registry will help employers reduce unemployment insurance costs by detecting and preventing unemployment insurance overpayments and fraud. If they will be working in Arizona while living in CA you are not required to do anything for CA.

Customer :

So employee completes W4 and I9. I product a W2 at the end of the year correct?

Robin D. :

Yes that is correct

Customer :

So employee completes i9 and W4. I produce and file W2 at the end of the year, correct?

Robin D. :

That is correct

Robin D. :

Here an IRS page that will give you access to new hire documents and information
http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Hiring-Employees

Customer :

So employee completes form i9 and w4 and I produce a w2 and year end, correct? Do I need to use e-verify? He will be working full time in CA. So if you could let me know what I need to do specifically for CA that would be great.

Robin D. :

Thank you for the state info. Yes CA will require that you register the employee in CA. You will need to withhold CA state taxes and comply with their reporting.
http://www.edd.ca.gov/payroll_taxes/new_hire_reporting.htm

Robin D. :

CA also has a booklet for employers that can address all their requirements (many of which can be completed online)
http://www.edd.ca.gov/pdf_pub_ctr/de44.pdf

This booklet will be invaluable to you.

Robin D. :

If you have an accountant I would make sure they get this copy especially if they are not familiar with CA employees and have mostly dealt with Arizona.

Robin D. :

I sincerely hope this chat has been useful.

Robin D. :

My goal is to give you excellent service. If you are satisfied, please rate me. If you have follow-up questions on this same topic, use the reply box below. To start a new conversation with me on a new topic request me again.

Customer :

Do I have to offer sick and vacation days now as well?

Robin D. :

The CA laws on that are outside of tax but here is a link to the CA laws on vacation days
http://www.dir.ca.gov/dlse/faq_vacation.htm

Robin D. :

We are normally supposed to advise you to complete (by rating) and post your different question as a new question.

Robin D. :

There is no legal requirement in California that an employer provide its employees with either paid or unpaid vacation time.

Robin D. :

I thank you in advance for a positive rating for the assistance thus far and look forward to assisting you in the future.

Expert:  Robin D. replied 11 months ago.
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