Can Non-statory Employee file Scheducle C?

[Linda Russell]

Client W2's Statatory Employee Box not checked on his W2.  Can client file a Schedule C without Income?  He still needs to claim his DOT Meals Expense.

[Just-Lisa-Now-]

No.  Those would be unreimbursed employee business expenses which used to be able to be included in miscellaneous itemized deductions until 2018 when TCJA took those away.

Some states still allow for the misc itemized deductions, the button to enter them is at the bottom of Sch A

[qbteachmt]

An employee is not also a Sched C operator for those same services.

Form 2106 no longer applies for Fed; the State may or may not be following the Fed regulation change.

It is better if employees get reimbursed under an accountable plan, since they do not have personal write offs.

[Linda Russell]

 Statutory Employee Box should have been checked, according to the Tax Payer.  Does he have any recourse?  He no longer works for the company.

[qbteachmt · Accepted solution]

The employer should issue a corrected W2.

[TaxGuyBill]

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@Linda Russell wrote:

 Statutory Employee Box should have been checked, according to the Tax Payer.  

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LOL.  That is funny.  Why do you think the taxpayer would know?

I'm not aware of any Statutory Employee that is subject to DOT rules.

https://www.irs.gov/businesses/small-businesses-self-employed/statutory-employees

[Linda Russell]

Taxpayer is an OTR driver.  He used to get a 1099 and filed a Sch C for his DOT meals per diem.  2019 he was given a W2 and was told his W2 needed to have the Statatory Employee box checked to allow for Sch C.  Perhaps I should have started with that information.

Happy to give you a laugh for underinformed Driver that brings stuff to your town for your enjoyment.    Thank you for your time.

[Just-Lisa-Now-]

If the client can contact the employer for a corrected W2 that has the Statutory Employee box checked, you'd be in business.

[TaxGuyBill]

As the link above shows, only very selected jobs qualify for "Statutory Employee", and a general Over-The-Road truck driver is not one of them.

So unfortunately, your client is stuck, and nothing is deductible on the Federal return.  If he continues to work for that employer, he REALLY needs to negociate how is he paid.

[qbteachmt]

This is correct: "and was told his W2 needed to have the Statatory Employee box checked to allow for Sch C"

What it doesn't state is if that relationship applies. If it applies, the employer is supposed to have already done that part.

So, it isn't clear if the employer was pointing out to the employee why/that it doesn't apply, or the employer overlooked that selection.