| Q: What is the premium basis for sole proprietor, partners or members of an LLC? |
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A: The amount of profit shown on IRS Schedule K-1 for partnerships and LLC’s and IRS Schedule C for sole proprietors. There is a minimum of$15,600 and a maximum of $52,300.
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| Q: Is the premium basis the same for a sole proprietor, partners or members of an LLC depending upon whether they have employees or not? |
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A: Yes. The premium basis is the amount of profit shown on IRS Schedule K-1 for partnerships and LLC’s and IRS Schedule C for sole proprietors. There is a minimum of$15,600 and a maximum of $52,300.
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| Q: What if a sole proprietor, partner or member of an LLC makes less than $15,600? |
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A: The minimum amount of $15,600 will be used.
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| Q: What if a sole proprietor, partner or member of an LLC makes more than $51,200? |
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A: The maximum amount of $52,300 will be used.
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| Q: What if they don’t have a Federal tax return, or do not want to provide it? |
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A: The maximum amount of $52,300 will be used.
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| Q: What about investors that are not involved in the day to day business? |
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A: The NCCI filed a rate filing allowing for payroll exclusions for members of limited liability companies and partners who do not have any duties and do not visit the premises, except perhaps to attend directors’ meetings. The filings are for the construction industry only and will be effective June 1, 2009. So the “silent partner” will not be included in the premium calculation.
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| Q: What about a partner who does not draw a salary, but works on the job site? |
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A: That partner is considered a “worker” and will be covered under the workers’ compensation law. The premium basis will be based upon the Schedule K-1.
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| Q: Who can I contact if I suspect a competing contractor is not complying with the law? |
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A: The Department of Labor and Workforce Development has a request to investigate form. It is found on http://www.state.tn.us/labor-wfd/forms/wc_request_invest.pdf
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| Q: How can I verify that a subcontractor’s policy is in effect? |
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A: Visit http://www.tn.gov/labor-wfd/wcomp.html and select the Coverage Verification Services link at the bottom.
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