Form 8919 for Expats Explained: Worker Misclassification and Uncollected FICA Tax

If your employer treated you as an independent contractor when you should have been classified as an employee, you may be paying more Social Security and Medicare tax than you owe. Form 8919 lets you pay only the employee share of these taxes (7.65%) instead of the full self-employment rate (15.3%), and it protects your Social Security benefits record at the same time.

According to the IRS, Form 8919 (Uncollected Social Security and Medicare Tax on Wages) is used when an employer didn’t withhold Social Security and Medicare taxes from your pay because they classified you as a contractor instead of an employee. This matters because the classification determines how much you pay: employees split FICA taxes with their employer (7.65% each), while independent contractors pay the full 15.3% through self-employment tax. On $80,000 of income, that’s the difference between paying $6,120 and $12,240. Key facts:

What it does: Reports your wages and calculates the employee-only share of Social Security and Medicare tax when your employer misclassified you
Why it matters: Saves you roughly half of your FICA tax obligation and ensures your earnings are credited to your Social Security record as wages (not self-employment income)
Who it’s for: Workers who received a Form 1099-NEC instead of a W-2 but believe they should have been classified as employees

Misclassified as a Contractor? You May Be Owed Relief

Greenback helps you file Form 8919 and handle uncollected FICA taxes correctly.

Here’s how worker misclassification affects your taxes, why it’s especially common for expats, and how to handle it.

What Worker Misclassification Means for Your Taxes

When a company hires you as an employee, they’re responsible for withholding Social Security tax (6.2%) and Medicare tax (1.45%) from your paycheck, and they pay a matching 6.2% and 1.45% on top of that. Your total cost: 7.65%. Their total cost: 7.65%. Combined: 15.3%.

When that same company classifies you as an independent contractor instead, they don’t withhold anything. You receive a Form 1099-NEC at year-end (instead of a W-2), and you’re responsible for the full 15.3% through Schedule SE.

Form 8919 exists to address the gap between the two scenarios: you were treated as a contractor, but you should have been treated as an employee. It lets you pay the 7.65% employee share and report your income as wages on your Form 1040.

Tax Type	Employee (W-2)	Contractor (1099-NEC)	Misclassified Worker (Form 8919)
Social Security (6.2%)	Split with the employer	You pay the full 12.4%	You pay employee share (6.2%)
Medicare (1.45%)	Split with the employer	You pay the full 2.9%	You pay employee share (1.45%)
Your total FICA cost	7.65%	15.3%	7.65%
Social Security wage base (2025)	$176,100	$176,100	$176,100

Example: Ana earns $90,000 working for a U.S. consulting firm in London. The company issues her a 1099-NEC instead of a W-2. If she files Schedule SE as a contractor, she owes approximately $12,730 in self-employment tax. If she files Form 8919 as a misclassified employee, she owes approximately $6,885. That’s a $5,845 difference at the same income level.

Why Worker Misclassification Is Common for Expats

Misclassification happens more frequently in expat situations because of the way international employment is structured:

U.S. companies hiring Americans abroad on contract terms: Some companies prefer to engage overseas workers as independent contractors to avoid setting up foreign payroll, dealing with local labor laws, or paying the employer share of FICA. Even if the working relationship looks like employment (set hours, company equipment, long-term engagement), the company issues a 1099-NEC.
Foreign subsidiaries and staffing arrangements: A U.S. company may route your pay through a foreign entity or staffing agency, creating ambiguity about whether you’re an employee of the U.S. parent, the foreign entity, or neither.
Remote workers for U.S. clients: Americans living abroad who work full-time for a single U.S. company, use company tools, follow company processes, and don’t serve other clients may be employees in substance even if their contract says “independent contractor.”

The IRS uses multiple factors to determine classification, including how much control the company has over your work, whether you use your own equipment or theirs, whether you can work for other clients, and whether the relationship is ongoing or project-based. No single factor is decisive, but the overall picture determines your status.

IRS Reason Codes: Establishing Your Basis for Filing Form 8919

Form 8919 requires you to select a reason code (A through H) that explains why you believe you were misclassified. The most common codes for expats:

Code A: You filed Form SS-8 (Determination of Worker Status) with the IRS and haven’t received a reply yet. Form SS-8 asks the IRS to formally determine whether you’re an employee or contractor.
Code C: You received a determination from the IRS (via Form SS-8 or audit) that you’re an employee of this company.
Code G: You received a 1099-NEC from this employer, and the services you provided should have been classified as employment. This is the most common code when you haven’t filed Form SS-8 but have a reasonable basis to believe you were misclassified.
Code H: You received a W-2 and a 1099-NEC from the same employer for the same year, and the 1099-NEC wages should have been included on the W-2.

Selecting the wrong reason code or filing Form 8919 without a reasonable basis for believing you were misclassified can create problems. The IRS may reclassify your income back to self-employment and assess the full 15.3% plus penalties. This is a determination your tax professional should make based on the specifics of your working relationship.

What Form 8919 Does Not Cover

Income tax: Form 8919 only addresses Social Security and Medicare taxes. Your income is still reported on Form 1040 and subject to federal income tax (which the FEIE or FTC can reduce or eliminate).
Totalization agreements: If you live in a country with a totalization agreement and you’re paying into that country’s social security system, you may be exempt from U.S. FICA entirely, regardless of whether you’re classified as an employee or contractor. In that case, Form 8919 may not be needed.
State employment taxes: Form 8919 is a federal form. State-level employment tax issues related to misclassification are handled separately.
Your employer’s obligations: Filing Form 8919 doesn’t force your employer to reclassify you or pay their share of FICA. It only affects your tax return. If you want the IRS to formally determine your status and potentially require your employer to correct the classification, you’d file Form SS-8 separately.

How Greenback Handles Worker Misclassification for Expats

Worker classification is one of the most nuanced areas of expat tax. Filing Form 8919 incorrectly (or filing it when Schedule SE is the right form) can trigger IRS scrutiny. Our CPAs and Enrolled Agents help by:

Evaluating your working relationship to determine your correct classification: We review your employment contract, the nature of your work, and the IRS’s multi-factor test to determine whether you have a reasonable basis to file Form 8919. If the evidence supports employee status, we proceed with Form 8919. If it doesn’t, we file Schedule SE correctly and look for other ways to reduce your tax burden (such as totalization agreements).
Selecting the correct reason code and preparing the form: The reason code on Form 8919 must match your specific situation. We determine the right code, complete the form, and attach it to your return with supporting documentation.
Coordinating with your full expat tax strategy: Form 8919 interacts with your FEIE or FTC calculations, your Social Security earnings record, and potentially your totalization agreement status. We handle the complete picture so all the pieces work together.
Advising on whether to file Form SS-8: If the misclassification is ongoing and you want the IRS to formally determine your status, we can advise on the implications of filing Form SS-8, including how it might affect your relationship with the company.

Frequently Asked Questions

What’s the difference between Form 8919 and Schedule SE?

Schedule SE calculates self-employment tax (15.3%) for legitimate independent contractors. Form 8919 calculates the employee share of FICA (7.65%) for workers who were misclassified as contractors but should have been employees. The key difference is cost: Form 8919 roughly halves your FICA obligation. You use one or the other, not both, for the same income.

Can I file Form 8919 without first filing Form SS-8?

Yes. Reason Code G allows you to file Form 8919 if you received a 1099-NEC and have a reasonable basis to believe you should have been classified as an employee, even without an IRS determination. However, if you want the IRS to formally confirm your status (which may also trigger consequences for your employer), you can file Form SS-8 at any time.

Does Form 8919 affect my Social Security benefits?

Yes, positively. Income reported through Form 8919 is recorded as wages in your Social Security earnings history, which is used to calculate your future benefits. If you file Schedule SE instead, the income is recorded as self-employment earnings. Both count toward your earnings record, but the classification can affect how benefits are calculated in certain situations.

What if my employer is a foreign company?

Form 8919 applies when a U.S. employer (or a company with U.S. payroll obligations) misclassifies you. If your employer is a foreign company with no U.S. presence, the misclassification issue doesn’t typically arise in the same way, because foreign employers generally have no obligation to withhold U.S. FICA taxes. In that case, you’d report the income directly on Form 1040 and may owe self-employment tax through Schedule SE unless a totalization agreement applies.

Does the FEIE reduce my Form 8919 tax?

No. The FEIE excludes income from federal income tax, but it does not reduce Social Security and Medicare taxes. Whether you file Form 8919 (7.65%) or Schedule SE (15.3%), FICA taxes are calculated on your full earnings regardless of the FEIE. The only way to reduce FICA when working abroad is through a totalization agreement with your host country.

Your Next Steps

If you’re receiving a 1099-NEC from a company that treats you like an employee, the classification may be wrong, and you may be paying thousands more in FICA taxes than you should. But filing Form 8919 without a solid basis can create problems of its own.

If you’re not sure whether your working arrangement qualifies for Form 8919 or you need help determining the right approach, we can help. Our CPAs and Enrolled Agents work with misclassified expat workers regularly and know how to evaluate your situation, select the right form, and coordinate it with the rest of your expat tax return.

Contact us, and one of our Customer Champions will be happy to help. If you’re ready to be matched with a Greenback accountant, get started here.

Fix Worker Misclassification the Right Way

Greenback helps you handle Form 8919 and related filings from start to finish.

This article is for informational purposes only and does not constitute tax, legal, or accounting advice. Worker classification is a complex area with significant implications. For advice related to your specific situation, consult with a qualified tax professional.