When the IRS announced its employee classification amnesty, it caused a number of concerns for employers. A primary concern was whether the States would conform, or if they would just consider the IRS application a confession and prosecute taxpayers that take advantage of the program. While it may be too soon to tell in many states, some have conformed already.
Minnesota, for example, has announced a parallel plan. There isn’t even a state form to fill out; the taxpayer only needs to write “Minnesota Worker Classification Voluntary Compliance Initiative” on his IRS Form 8952, Application for Voluntary Classification Settlement Program. It is important to note, however, that while the IRS amnesty program has no announced expiration date, the Minnesota plan is available only through December 16, 2011. As noted in earlier blog on caveats, even if the states were to completely conform, there is still much to consider before choosing to partake of the amnesty. We advice that you consult with one of our experienced tax professionals and/or your employer attorney.