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Ellen
Ellen, Attorney
Category: Business Law
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In Indiana, is a non-profit Condominium corporation required

Customer Question

In Indiana, is a non-profit Condominium corporation required to tax money paid to an owner who does maintenace work on the association property?
Submitted: 4 years ago.
Category: Business Law
Expert:  Ellen replied 4 years ago.
FiveStarLaw :

*This chat is not intended as legal advice. It is general information that may or may not apply to your situation and should not be relied upon.*

FiveStarLaw :

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FiveStarLaw :

A condominium association does not have the right to impose a tax of any type

FiveStarLaw :

Are you possibly referring to payroll taxes?

JACUSTOMER-zanm7lzj- :

I don't think so. This is a gentleman who used to volunteer to change light bulbs, shovel walks, etc. and is now being paid for these light duties. He earns about $1,200 a year from the association.

FiveStarLaw :

Thank you for your response

FiveStarLaw :

A condominium does not have the authority to tax

FiveStarLaw :

However as an employer it would be required to withhold payroll tax

FiveStarLaw :

Does this make sense to you

JACUSTOMER-zanm7lzj- :

Would he be an employee if he only does random jobs at random times as needed?

FiveStarLaw :

Yes he could still be considered an employee rather than an independent contractor

FiveStarLaw :


A general rule is that anyone who performs services for you is your employee if you can control what will be done and how it will be done.

IRS publication 15 - http://www.irs.gov/pub/irs-pdf/p15.pdf is the main document that addresses employee status -- see page 8.

JACUSTOMER-zanm7lzj- :

And as an independent contractor earning more than $600, he would be issued a 1099? Are materials included? Sometimes he buys light bulbs and we add that amount to his check.

FiveStarLaw :

And as an independent contractor earning more than $600, he would be issued a 1099? correct

FiveStarLaw :

Are materials included? yes

FiveStarLaw :

Sometimes he buys light bulbs and we add that amount to his check. he would take a deduction on his tax return for unreimbursed supplies

JACUSTOMER-zanm7lzj- :

What if he has to change a large pump and adds $300 to what we owe him (say $100 for labor) making that a total of $400 for that job. The whole $400 is taxble?

FiveStarLaw :

no – only the $100 would be taxable. Unreimbursed supplies would be deducted from income on the independent contractor's tax return

JACUSTOMER-zanm7lzj- :

But he is being reimbursed for the supplies (pump).

FiveStarLaw :

I understand that

FiveStarLaw :

what is it you are trying to accomplish

JACUSTOMER-zanm7lzj- :

So only labor would go on the 1099?

FiveStarLaw :

The 1099 can list either labor only OR labor plus reimbursed supplies. If the 1099 lists labor plus reimbursed supplies, the independent contractor would deduct the cost of the supplies in arriving at adjusted gross income on his tax return

JACUSTOMER-zanm7lzj- :

I think I get it now. Last year he earned $1,200 in labor and was reimbursed for several large jobs for $3,000 in materials to complete association projects. We only have to list the $1,200 on the 1099. Correct?

FiveStarLaw :

Yes you can do that!

JACUSTOMER-zanm7lzj- :

Thank you so much. You have been very helpful.

FiveStarLaw :

Thank you so much. I wish you the best

JACUSTOMER-zanm7lzj- :

I will check the "excellent service"

FiveStarLaw :

thank you very much.