The Gig Is Up Act would require large companies to withhold payroll taxes on payments made to independent contractors, treating those payments similarly to employee wages for tax purposes. The bill applies only to businesses with at least $100 million in annual gross receipts that contract with at least 10,000 individuals for services. For affected companies, payroll tax rates would double compared to current rates on contractor payments, and these amounts would count toward Social Security earnings. The changes take effect on January 1, 2027, giving businesses time to adjust their systems and processes before the new requirements apply.
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