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What is the ABC test and does it apply to my company?

Sales tax & state compliance

The ABC test is a worker classification standard used by several states, including California. A worker is an employee unless all three prongs are met, covering control, work outside the usual course of business, and an independent trade.

It is stricter than the federal test, so a worker can be a contractor federally and an employee under state law.

We handle this for founders running US companies.

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Check your EIN confirmation letter (CP 575) first. If that is gone, look at a previously filed tax return, a business bank account application, or any 1099 you have issued. Your bank or your payroll provider will also have it on file.

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