Apprentices by definition are not independent contractors.
The purpose of apprenticeships is to allow a person to work under the supervision of a competent mentor. Therefore, if the apprentice is paid in any form for the work performed, the mentor is responsible for all the usual employers’ portion of taxes due on the wages and possibly required by their state to carry workers’ compensation insurance.
In the event that the apprentice suffers an injury, the mentor could be responsible for any medical care expenses, or more.
Employers are required to file W-2 Forms for each employee for whom they paid any wages. Returns have a significantly higher risk of audit if W-2s or 1099s were not filed after the employer entered any amount of wages and salaries or commissions paid on:
- Lines 10 (Commissions), 26 (Wages) or 48 (Other Expenses) of Schedule C, Form 1040, (Individual Return); lines 12 (Officers Compensation), 13 (Wages & Salaries) or 26 (Other Deductions) of Form 1120 (Corporate Return);
- Lines 9 (Wages & Salaries) and/or 20 (Other Deductions) on Form 1065 (Partnership Return).
Good intentions without adequate forethought on the part of a business owner could have serious consequences. If a farrier does not have an established protocol for entering into an apprenticeship arrangement, he or she should consult with their certified public accountant or attorney first before taking on an apprentice.