HBP Part 12.1. Introduction and Resources

Date published: Oct. 9, 2009
Last revised: March 25, 2022
Issued by: Tax Services


A. Introduction

To obtain the services of an individual, a department must comply with this policy. For the purposes of Part 12. Independent Contractors, “individual” means a natural person, a sole proprietor business, or a single member LLC that is disregarded for federal tax purposes.

B. Establish Vendor Record

A department will send a Payee Information Form (PIF) to the individual. Once the PIF is completed by this individual, a department will create a GGV vendor record. The PIF and GGV steps are only necessary if the individual does not have an existing vendor record.

C. EICCC Determination

Use the individual’s EID to complete the Employee/Independent Contractor Classification Checklist (EICCC) for the anticipated services. If the EICCC classifies an individual as an employee, the services must be authorized and paid through payroll. If the EICCC classifies the individual as an Independent Contractor (IC), proceed to authorize the services, as outlined below.

D. Authorization

The type of services performed and the amount paid for an IC’s services will determine the type of authorization required. Generally, a Purchase Order (PO) is used to authorize the services of an individual (see HBP Part 7. Purchasing). However, a business contract may be required in certain situations. See the PO vs. Contracts Matrix for further guidance.

E. Payment

After the authorized services have been satisfactorily performed by the IC, the department will create a payment voucher, either a VP1 (Purchase Order) or VP2 (business contract). Support for the payment voucher must be sent to the Image Retrieval System and include:

  • a copy of the invoice
  • the EICCC with IC result
  • a copy of the PO or business contract

Tax Services will review the above documentation before final approving the payment.

F. Tax Reporting

In accordance with IRS instructions, Tax Services reports the payments made to an IC on the appropriate forms (e.g. Forms 1099-NEC, 1099-MISC, or 1042-S). See the Tax Services Tax Forms page for more details.

G. Additional Resources



Part 12. Independent Contractors - Table of Contents