Statutory nonemployees: real estate agents and direct sellers

Three categories, two rules

Publication 15-A (2026) sorts workers into four relationship categories: independent contractor, common-law employee, statutory employee and statutory nonemployee. A statutory nonemployee is the mirror image of a statutory employee. A statutory employee may be a contractor at common law but is treated as an employee for certain taxes. A statutory nonemployee could look like an employee on the facts but is treated by statute as self-employed. The publication names three categories: direct sellers, licensed real estate agents and certain companion sitters. Direct sellers and real estate agents share a two-part test, while companion sitters have a separate rule.

The two conditions for direct sellers and real estate agents

Both must be met. First, substantially all payments for the services as a direct seller or real estate agent must be directly related to sales or other output rather than to the number of hours worked. A commission or a per-sale fee fits; an hourly wage or a salary does not. Second, the services must be performed under a written contract providing that the individual will not be treated as an employee for federal tax purposes. The contract has to exist and say that, in writing. When both hold, the person is treated as self-employed for all federal tax purposes, including income and employment taxes, so the payer does not withhold or match payroll taxes.

Try the checker: choose real estate agent, tick the first two boxes, and the result is self-employed. Untick the written contract and the tool reports that the common-law rules decide, naming the missing condition. That outcome is the publication’s own structure: failing a condition does not make the person an employee automatically; it returns the question to the common-law factors in section 2.

Who counts as a direct seller

The publication describes three groups. One: people selling or soliciting the sale of consumer products in the home or at a place of business other than a permanent retail establishment. Two: people selling consumer products to any buyer on a buy-sell, deposit-commission or similar basis prescribed by regulations, for resale in the home or at a place of business other than a permanent retail establishment. Three: people in the business of delivering or distributing newspapers or shopping news, including services directly related to that delivery or distribution.

Direct selling also includes the activities of individuals who try to increase direct sales by their direct sellers and earn income based on those sellers’ productivity. The publication lists motivating and encouraging, imparting skills, knowledge or experience, and recruiting. That language describes the upline in a direct sales organization.

Licensed real estate agents

The category covers licensed real estate agents. The publication adds that it includes individuals engaged in appraisal activities for real estate sales if they earn income based on sales or other output. The same two conditions apply: pay based on output, and a written contract disclaiming employee status. A brokerage that pays an agent a salary, or by the hour for floor duty, may have a problem with the first condition.

Companion sitters

Companion sitters furnish personal attendance, companionship or household care services to children or to individuals who are elderly or disabled. The rule concerns the middleman. A person in the business of putting sitters in touch with people who want to employ them, a companion sitting placement service, is not treated as the employer of the sitters if it does not receive or pay the sitters’ salary or wages and is compensated by the sitters or the people who employ them on a fee basis. Sitters who are not employees of a placement service are generally treated as self-employed for all federal tax purposes. The publication warns that a sitter may still be an employee of the individual who receives the services, and points to Publication 926, Household Employer’s Tax Guide.

How this differs from a statutory employee

Do not confuse the two. Statutory employees are the four categories of drivers, life insurance agents, home workers and salespeople who must be treated as employees for social security and Medicare taxes if three conditions hold, and their Form W-2 has the statutory employee box checked. Statutory nonemployees are the reverse. Our common-law rules page explains the baseline test, and this page covers the cost of getting it wrong.

Sources

• IRS Publication 15-A, Employer’s Supplemental Tax Guide (2026): section 1, Who Are Employees?: Statutory Nonemployees. Read November 2, 2026.

Edition read: Publication 15-A (2026), for use in 2026. Rates, wage bases and dollar limits on this page are the 2026 figures printed in that edition; check the current publication and the IRS employment tax pages for your tax year. This page summarizes the publication and does not replace it.