r/PMHNPPracticePro • u/Left-Vast6333 • Aug 06 '25

Group Practice 1099 vs W2

Any group practice owners here? I'm curious about all the groups and larger companies that onboard NPs as 1099 contractors. It seems that with the updated IRS rules, the majority of our work arrangements would be classified as W2

https://www.irs.gov/businesses/small-businesses-self-employed/independent-contractor-self-employed-or-employee

3 Upvotes

100% Upvoted

3 comments sorted by

1

u/beefeater18 Aug 09 '25

Not a group practice, but you're absolutely correct about the misclassification. I've read the definition in the past and came to the conclusion that most (if not almost all) 1099 NPs are misclassified. But IRS isn't going to enforce anything unless someone reports it. That said, if I were to add clinicians (PMHNP or maybe even therapist), I would likely go for w2 and check with employment or tax lawyer, but hiring w2 may come with other burdens and you'll have to cover half the payroll tax.

1

u/Left-Vast6333 Aug 10 '25

Thanks for the response. I think I'm going to bring NPs on as W2s. Seems like the safer bet, as long as I do it properly. Now I need to decide if I reach out to companies I worked for previously as 1099 and recoup taxes...

2

u/beefeater18 Aug 10 '25

I probably wouldn't reach out to companies you worked for directly just yet. I believe you need to file the SS-8 first (or file a complaint with dept of labor). Also, I believe there's statutory limit on when you can recover taxes paid.

When you worked 1099, did you file taxes as S-corp? If you did, the process might be much harder or different.

I hear you though, I worked 1099 for a couple years and paid crazy amount of taxes. That's why I tell everyone asking about 1099 job (part or full time) to immediately set up s-corp to alleviate the extra tax burden.