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New Tax Rules for Large Businesses Using Independent Contractors

This act changes how large businesses must handle taxes for independent contractors (gig workers). These companies will now be required to withhold payroll taxes for these contractors, similar to regular employees. This impacts the finances of both businesses and contractors, altering their tax obligations and potential benefits.
Key points
Large businesses (over $100M in gross receipts and 10,000+ independent contractors annually) must treat payments to independent contractors as employee wages.
These businesses will pay higher Social Security (12.4% instead of 6.2%) and Medicare (2.9% instead of 1.45%) taxes on independent contractor earnings.
Independent contractors may see changes in their Social Security contributions, potentially affecting future benefits.
The changes apply to payments made after December 31, 2021.
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Expired
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Additional Information
Print number: 117_HR_5704
Sponsor: Rep. Watson Coleman, Bonnie [D-NJ-12]
Process start date: 2021-10-22
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Summarized by: gemini-2.5-flash-preview-05-20
Source data: api.congress.gov
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OFFICIAL LEGAL TITLE

Gig Is Up Act

FREQUENTLY ASKED QUESTIONS

What is the official ID of this bill?

The official print number for this legislation is 117_HR_5704.

Which chamber initiated this legislation?

This legislation was initiated in the House of Representatives.

When did the legislative process begin?

The process officially started on 2021-10-22.

What are the main provisions?

Key points include:

  • Large businesses (over $100M in gross receipts and 10,000+ independent contractors annually) must treat payments to independent contractors as employee wages.
  • These businesses will pay higher Social Security (12.4% instead of 6.2%) and Medicare (2.9% instead of 1.45%) taxes on independent contractor earnings.
  • Independent contractors may see changes in their Social Security contributions, potentially affecting future benefits.
  • The changes apply to payments made after December 31, 2021.
What is the specific legal status?

The current status is Expired.

Where can I read the full text of this legislation?

The full official text is available at: View full text

Who is the primary sponsor?

The primary sponsor is Rep. Watson Coleman, Bonnie [D-NJ-12].

What is the latest detailed status?

The latest detailed status is: Referred to the House Committee on Ways and Means.

Is this summary verified?

Yes. This content was analyzed by AI and verified by the Lustra Judge System on 2025-12-28.

CATEGORIES

Taxes Labor Economy