Bringing in extra help this summer? That’s great—until the IRS joins the party uninvited.
Whether you’re onboarding interns, part-time assistants, or seasonal staff, summer hiring is a minefield for small business owners. From misclassifying workers to missing out on tax credits, a single mistake can cost thousands in penalties and missed opportunities.
Let’s make sure your summer hustle doesn’t turn into a compliance headache.
The Contractor Myth: “It’s Just for the Summer”
Meet Bob. Bob runs a growing landscaping business in Northern Virginia. Every June, he hires college students to help with lawn care and customer service. “They’re here for a few weeks,” Bob reasons. “I’ll just pay them like contractors. Saves paperwork.”
Here’s the problem: The IRS doesn’t care if it’s “just for the summer.” If Bob controls how, when, and where someone works, they’re likely an employee—not a contractor. That means Bob should be issuing W-2s, not 1099s.
Pro tip: If your summer worker is using your equipment, working your hours, and reporting to your manager—yes, they’re an employee.
🔗 Here’s what the IRS says about worker classification
Interns Aren’t Free Labor (Usually)
We get it—internships sound like a win-win. But before you hand someone a desk and call it a “learning experience,” make sure you’re playing by the rules.
Unless an internship is part of a formal educational program and provides no immediate advantage to your business, that intern probably counts as an employee under Department of Labor standards.
That means:
- You may need to pay at least minimum wage
- You could be on the hook for payroll taxes
- Workers’ comp requirements might kick in
Reality check: If your intern is answering phones, posting to your social media, or filing real paperwork, you likely owe them a paycheck—and the protections that come with it.
Your Secret Weapon: The Work Opportunity Tax Credit (WOTC)
Here’s where summer hiring gets exciting.
If you hire from certain groups—like veterans, long-term unemployed individuals, or youth ages 16–17 in certain areas—you may qualify for the Work Opportunity Tax Credit (WOTC). That’s up to $2,400 per qualifying summer employee, directly off your federal tax bill.
The catch? You must:
- Apply before the employee’s start date
- Submit paperwork to your state workforce agency
- Certify eligibility properly
Most businesses miss out because they don’t know they qualify. But we help clients find and file for these credits every year. Don’t leave free money on the table.
🔗 Learn more about the WOTC here
What to Check Before Your First Payday
Let’s make this easy. Before you cut the first check:
✅ Register for payroll withholding (federal and state)
✅ Collect Form I-9 and Form W-4 for every employee
✅ Use a real payroll system—manual payments = compliance gaps
✅ Know your state and local labor rules (some mandate sick leave)
✅ Understand overtime rules—even for “temporary” help
Hot tip: Even if someone only works 25 hours a week, if they work more than 40 in a week or over 8 in a day (depending on your state), you may owe overtime. Summer burnout isn’t just for interns—it’s for your budget too.
Why It Matters: Avoiding the Payroll Penalty Pitfall
Imagine this: Your summer hire files for unemployment in August—and the state can’t find a record of their employment.
Now you’re facing:
- State audits
- Penalties for misclassification
- Unpaid payroll taxes (plus interest)
- Legal headaches from ex-employees
Worse? You could also miss out on valuable tax credits you were actually eligible for.
Moral of the story: A “simple summer job” can become an IRS nightmare—unless you get it right from day one.
JS Morlu Can Help You Hire Without the Hassle
We’ve helped hundreds of small business owners in Virginia and beyond set up compliant, efficient, and stress-free payroll systems for seasonal hiring. Whether you’re onboarding one intern or a fleet of summer associates, we’ll help you:
- Avoid misclassification risks
- Stay compliant with federal and state laws
- Claim every credit and deduction you’re entitled to
Let’s make your summer staffing simple, legal, and financially smart.
👉 Schedule a free consultation before you run that first paycheck.
Your business deserves peace of mind. Let’s start there.
