Easiest way to convert contractors to employees

Welcome to the Community, misramrrero-gmail.

I know a way how you can convert contractors to employees in QuickBooks Online (QBO). Let me help you with this.

You can set a contractor as a new employee in QBO. However, before the transition, you'll have to deactivate first your contractor's active status. Since QuickBooks will not recognize employees and contractors with the same name.

Here's how to deactivate your contractor:

1. Go to the Employees tab, and find the contractor to deactivate.
2. Tap the contractor's current status.
3. Click Edit next to Contractor information.
4. Choose Inactive from the Status drop-down list.
5. Hit Save.

After which, you may now add an employee:

1. Tick Workers, then choose Employees.
2. Hit Add an employee.
3. Fill in the necessary fields, then choose Done.

For more detailed steps, you can see this article: Add or edit an employee in Online Payroll.
 

Also, I've shared these articles that explained about W-2 and how you pay your employee in Quickbooks Online:

• How to Understand and Fill Out a W2
• Add or change pay types 

Ping me if you have additional questions about converting contractors to employees. It's my priority that all of your concerns are addressed. Have a good one! 

The link for the article to convert an employee to contractor does not woro. Could you please send it to me?

Hello there, NSBone. It's nice to see you joining this thread!

The article shared above about converting contractors to employees is no longer available. No worries, I'll help you correct your employee setup to a contractor's profile in no time.

We need to deactivate or delete the employee's profile. Then, re-enter the data as your contractor. To accomplish this process, we can follow these steps.

1. Go to the Payroll menu.
2. Select Employees. Then, click the employee name.

3. Click the Active drop-down arrow. Then, select Delete employee. Make sure to do it when you're employee is only set up accidentally or there's no existing payroll data.

    

Next, enter their details as a contractor. Here's how:

1. Go to Payroll and select Contractors.
2. Select Add a contractor.
3. Enter your contractor’s info, or select the Email this contractor checkbox so they can fill it out.
4. When you're done, select Add contractor.

For further guidance about setting up contractors and tracking 1099: Create and file 1099s with QuickBooks Online.

If you want to gather some information with your contractor's data, we can pull up the Transaction by Vendor report. To personalize your QuickBooks reports, we can check the links below.

• Get the most out of your financial reports.
• Memorize reports in QuickBooks Online.

Whenever you need help with setting up your employees and contractors, please know that you can tap me on my shoulder anytime. Take care and stay safe.

The reason this doesn't work is I need to issue a 1099 as a contractor for part of the year and then a W2 for the other part.  When entering the SS# in the employee field, it won't allow as it is already used in the Contractor profile.

So how do you get around that?

You're correct, susan. Having multiple workers share the same Social Security Number (SSN) isn't possible. However, we have some alternatives to explore that can help resolve this issue. 

First, you will need to minor adjustment to the SSN on one of your worker's profiles, either the contractor or the employee. You can do this by adding a single digit or using a temporary placeholder. This step is essential to ensure the forms are submitted smoothly.

Second, issue the form for the worker with the correct SSN. After issuing the correct form, you can update the worker's profile with the altered SSN to the correct one and send it accordingly for that specific worker.

Lastly, I'll share these articles you can refer to for more information on viewing your past forms and payments, as well as printing tax forms for your employees and contractors:

• View your previously filed tax forms and payments
• Print your W-2 and W-3 forms
• Print your 1099 and 1096 forms

Don't hesitate to share your concerns about tax form inquiries in the comments. We're here to provide clear, professional, and timely assistance tailored to your specific needs.