Marketing & PR Agencies: Payroll Tax Guide (2026)

Tax rules specific to marketing agencies

The IRS decides employee versus contractor status under common law rules grouped into three categories: behavioral control, financial control and the type of relationship. There is no set number of factors and no single factor decides, and a remote worker is an employee if the business has the right to control what will be done and how. Form SS-8 can be filed for an IRS determination.

For tax years beginning after 2025, Form 1099-NEC is required for each non-employee paid at least $2,000 in the year for services, up from $600, and the amount may be adjusted for inflation starting in calendar year 2027. Backup withholding applies at the same threshold.

State unemployment tax for a remote employee who performs all work from home in another state is owed to that state under the localization of work rules adopted in every state's UI law. In DOL's example, a New York employer's employee who moved to Florida and telecommuted full time became reportable to Florida from the date the telecommuting began.

The stack every marketing agency runs

On one of the market research analysts and marketing specialists at the May 2025 national median of $78,760, the employer share of Social Security and Medicare is $6,025 a year, FUTA is $42 after the 5.4 percent state credit on the first $7,000, and income tax withholding follows the employee's W-4. Deposits are monthly or semiweekly depending on the prior lookback period, with a next-business-day deposit whenever $100,000 accumulates. Form 941 is due the last day of the month after each quarter; W-2s and any 1099-NEC at the $2,000 threshold are due January 31.