Summer Hiring? Here’s How to Handle Seasonal Workers, Interns, and Payroll Compliance Without the Headache
Hiring for the summer?
That’s exciting—until the IRS gets involved.
While onboarding interns or part-time help sounds simple enough, summer hiring is one of the most common ways small business owners get tripped up on payroll, compliance, and classification.
And yes, even a single misstep—like putting a W-2 employee on a 1099 “just for the summer”—can cost you big.
Let’s Clear This Up: Not Everyone’s a Contractor
You’re not alone if you’ve ever said:
“We’re just paying them a flat rate—it’s easier that way.”
“They’re only here for 10 weeks.”
“They’re a student; it’s not really a job-job.”
Here’s the hard truth:
If you control when, where, and how someone works—you’re probably supposed to issue a W-2.
The IRS doesn’t care if it’s part-time, seasonal, freelance, or “just a favor.” If they look like an employee, they are one—and they want to see payroll taxes, not contractor payments.
Need the official word? See IRS guidelines on worker classification
Interns? Yes, They Usually Count Too.
Many businesses think unpaid internships are a gray area. But unless it’s tied to a formal educational program with no expectation of compensation, the Department of Labor may classify your intern as an employee.
That means:
Minimum wage laws apply
You may owe payroll taxes
Workers’ comp coverage could be required
Rule of thumb: If they’re contributing to your business, they probably need to be on payroll.
Don’t Miss Out on This: The Work Opportunity Tax Credit (WOTC)
Here’s some good news:
If you’re hiring people from certain target groups—like veterans, long-term unemployed, or summer youth employees—you might qualify for the WOTC, which can reduce your federal income tax liability by up to $2,400 per qualifying hire.
But:
You have to apply before hiring
The paperwork needs to be filed with your state agency
Most businesses never realize they’re eligible
More info? Explore the WOTC program here
Other Things to Nail Down (Before Your First Payday)
Set up correct federal and state withholding
Ensure you have an active payroll system (manual payments often miss required filings)
Collect and retain Form I-9s and W-4s
Check if local labor laws require sick leave or additional reporting for part-time workers
Know if you need to pay overtime—even if it’s “just for the summer”
The Bottom Line: Don’t Wing Payroll
We get it—your focus is on growing your business, keeping clients happy, and getting help in the door. But ignoring payroll compliance (even for “just a few weeks”) can lead to:
Penalties for misclassification
Missed tax credits
State audits
Unhappy former employees filing claims you didn’t see coming
Need a Hand Sorting It Out? Call Us Before You Hire
We’ve helped hundreds of small business owners set up summer payroll the right way—without overcomplicating things or drowning in red tape.
If you’re planning to bring on part-time, seasonal, or intern help in the next few weeks, let’s talk.
We’ll help you stay compliant, minimize tax risk, and maybe even find some credits you didn’t know existed.
Contact our office before you run that first paycheck—we’ll help you do it right from the start.
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Get to Know Prestige Accounting Services Group
Offices in Flemington, NJ, and Califon, NJ
Our Mission: At Prestige Accounting Services Group, we are on a mission to redefine the tax experience for individuals and small businesses. With a focus on personalized service, strategic planning, and expert guidance, we aim to empower our clients to succeed financially with confidence and ease.
Expertise in Action: With a wealth of experience and a team of dedicated professionals, we specialize in individual and small business tax preparation. While we excel in all areas of taxation, our passion lies in serving the unique needs of small business owners in New Jersey. We understand that small business taxation requires specialized knowledge and attention to detail, which is why we go above and beyond to ensure our clients receive the guidance and support they deserve.
Tailored Solutions for Every Client: Whether you're a high-net-worth individual seeking comprehensive tax planning or a small business owner in need of accounting and bookkeeping assistance, we have the expertise to meet your needs. Our team takes the time to understand your specific situation and develop customized solutions that align with your goals and objectives.
Why Choose Us?: What sets us apart from other New Jersey tax firms is our commitment to excellence and innovation in the field of taxation. We don't just prepare tax returns; we provide strategic insights, proactive planning, and actionable advice to help our clients achieve their financial goals. With a team of two CPAs, an EA, and an ERO, we have the expertise and resources to deliver exceptional service and results.
Your Success is Our Priority: At Prestige Accounting Services Group, we measure our success by the success of our clients. We are dedicated to building long-lasting relationships, providing unparalleled service, and helping our clients thrive in today's ever-changing tax landscape.
We can't wait for you to experience the Prestige Accounting Services Group difference.
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