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Last Updated: 7/16/2018

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Withholding Tax

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Withholding Tax > Tax Information > Independent contractors

  • What is the difference between a construction contractor and an individual construction contractor?Back to top

    A construction contractor (payer) is any individual or business entity carrying on a trade or business described in industry code numbers 23 through 238990 of the North American Industry Classification System (NAICS).

    An individual construction contractor (payee) is any individual carrying on a trade or business as a sole proprietorship described in industry code numbers 23 through 238990 of the NAICS.    

  • What is meant by "carrying on a trade or business"?Back to top

    The term "carrying on a trade or business" generally includes any activity conducted for the production of income from selling goods or performing services.  Carrying on a trade or business includes both primary business activity and secondary business activity. 

  • Am I required to register for a Minnesota tax identification (ID) number?Back to top

    If you are required to withhold Minnesota tax, you must have a seven-digit Minnesota tax ID number. 

    For detailed information, see What is a Minnesota Tax ID Number?

  • What information does a construction contractor need to retain?Back to top

    A construction contractor must retain the:

    • Name of each individual construction contractor paid;
    • Address of each individual construction contractor paid;
    • Social Security number of each individual construction contractor paid;
    • Amount paid to each individual construction contractor;
    • Amount withheld for each individual construction contractor; and
    • Federal Form W-9* for each individual construction contractor
      • Federal Form W-9 allows the payee to provide an FEIN in lieu of a Social Security number. ​