Yes, an employee can receive a W-2 and a 1099, but it should be avoided whenever possible. This type of situation is a red flag and frequently results in a response from the IRS seeking further information. It takes unusual circumstances for this type of dual filing to be legitimate.
In many ways, answering “Can an employee receive a W-2 and a 1099?” is not simple.
Different Types of Pay for Different Types of Work
The safest and most common situation for an employee to receive a W-2 and a 1099 is when that employee already has an independent business that actively serves other clients on the side. It is technically impossible for an “employee” to receive a 1099, because the central function of the forms is to distinguish employees and independent/self-employed contractors.
What you are really doing is submitting two different forms to a payee:
- A W-2 for their work as an employee
- A 1099-NEC for their work as an independent contractor
Specific instances of dual classifications that are outlined by Payroll Partners include:
- A receptionist who owns a cleaning service business and is contracted after hours to perform janitorial services
- A maintenance technician who owns a fabricating business and is contracted to fabricate their company’s equipment
- A sales manager who is independently contracted by their company to perform graphic design work that they do separately on the side
- A contractor early in the year who becomes an employee part-way through the year
Worker Classification and the Employee/Employer Relationship
Employees receiving a W-2 and a 1099 for essentially the same kind of work may be technically possible, but it can be even more problematic. That is because the IRS judges the “nature of the work production” to determine what distinguishes an employee from an independent contractor.
Circumstances that would dictate a change to an employee’s classification would be a shift in the common law rules:
- Behavioral (if the company can control how a worker does the job)
- Financial (whether or not the business aspects of a job is controlled by the payer)
- Type of relationship (the existence of written contracts or employee-type benefits)
Use Form SS-8 to Make it Official
Even if you are correct about an employee receiving a W-2 and a 1099, the IRS may question the decision at first. Use Form SS-8 to know that the business is in the clear. A relatively short and straightforward process will include:
- Describing the nature of the work and the business relationship in detail
- Receiving an official determination from the IRS about whether they consider the payee to be an employee or an independent contractor.
Using SS-8 to determine whether your employee requires both a W-2 and a 1099 is the best way to navigate through an inevitably murky situation. Submit your form as soon as you think that you will need an official decision.
It can take at least six months to receive notice of an IRS decision on your Form SS-8.
They will ultimately issue a binding determination letter or issue an informational letter, which is advisory but not binding.
People Also Ask:
Should you electronically file all W-2s and 1099s? – In 2025, small businesses are accustomed to e-filing most of their tax and information returns, particularly if they filed 10 or more returns of any type in a calendar year. Using software is an excellent way to save time and resources, as well as eliminate the cost of purchasing expensive W-2 and 1099 forms.
Get W-2 and 1099 Filing Software from AMS
The good news is, Advanced Micro Solutions’ 1099-etc software offers a variety of form filing capabilities whether you classify your workers as employees or contractors.
- W-2/1099 Forms Filer: The base program provides basic form preparation and essential data management features.
- AMS Payroll: The module has sophisticated interaction capabilities and can be added on to the core system, along with five other optional add-on modules.
When an employee receives a W-2 and a 1099, or your needs are separate from tax and wage reporting, we have the solution. Download our free 1099-etc Demo software and discover more about our software products.