Many states impose state income tax, with independent withholding requirements. Camps should check with their state department of revenue to determine liability and compliance procedures. No federal income tax withholding, FICA withholding, or FUTA payments apply to camp employment of independent contractors. There are objective and stringent criteria by which the IRS determines who is and who is not a legitimate independent contractor. Generally speaking, an independent contractor works under contract, provides his or her own equipment, and maintains total discretion in the details of how a particular service is provided.
Independent contractors are typically in business for themselves.
Examples in the camp environment might be pool service companies, construction contractors, or independent consultants. It does not matter if an employee has another job, and the full limit of social security taxes was already withheld by that employer. Electronic Deposits and Filings New requirements for large employers are being phased in by the IRS which will require electronic payments of withheld sums. Likewise, there is a requirement for electronic filing of W-2's when they exceed 200 in number. There is a serious question whether, upon audit, seasonal camps can avoid FUTA, SUTA, and minimum wage and hour liability if the camp is part of a larger year-round entity.