Critz, Rothfus dispute status of Republican’s staffers’ tax status
By Jeremy Boren
Published: Tuesday, August 7, 2012, 12:01 a.m.
Updated: Tuesday, February 19, 2013
U.S. Rep. Mark Critz accused his opponent of evading taxes on his campaign employee payroll, but Republican challenger Keith Rothfus contends he has done nothing illegal and owes no back taxes.
The dispute centers on whether politicians should consider campaign workers as full employees or independent contractors — designations that determine if a company must pay a portion of the employee's state and federal payroll tax contributions.
“Keith Rothfus has been caught red-handed evading taxes, and now he should do the right thing and repay all of the taxes he owes to the state and federal government,” said Mike Mikus, Critz's campaign manager, who runs his own company and works as an independent contractor for Critz.
Critz, 50, a Johnstown Democrat, has four full-time employees working for his campaign. Critz's campaign provided the Tribune-Review with a payroll tax summary that says it has paid more than $37,600 in employer taxes and contributions.
Rothfus, 50, of Sewickley employs independent contractors. His campaign manager, Jon Raso, declined to say how many.
“It's a matter of preference with the staff. It's commonly practiced and it's not illegal,” Raso said. “Right out of the Obama playbook, Mr. Critz is trying to do absolutely anything to distract from his failures in Washington.”
Namely, Raso said Critz has done nothing to reduce the “unacceptably high” 9.3 percent June unemployment rate in Cambria County, where he lives. The rate is 7 percent in Allegheny County.
Mikus said Rothfus is illegally trying to save money by not employing them full time. He said it's unfair of Rothfus to place the entire tax burden on his campaign employees.
Jennifer Jenkins, a spokeswoman for the Internal Revenue Service, said the issue comes up from time to time during political campaign season.
She declined to comment on the dispute between Critz and Rothfus, but she said the IRS has guidelines for determining if an employee is a contractor or not. Independent contractors generally have the latitude to set their own hours, pursue their own methods for completing tasks and determine if they need pay for extra help or supplies. Employees, on the other hand, are generally told by their employer what to do and how to do it, according to the IRS.
The IRS requires companies to pay a portion of an employee's combined Social Security and Medicare tax rates. The employee pays the other half. Independent contractors are responsible for paying the entire amount. The combined, self-employed tax rate for Social Security and Medicare is 15.3 percent of earnings, though it is currently 13.3 percent because oftemporary tax cut. Employers and employees also pay federal and state unemployment taxes based on wages.
Jeremy Boren is a staff writer for Trib Total Media. He can be reached at 412-320-7935 or email@example.com.
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