Common-law employee
A worker the IRS classifies as an employee under the common-law right-of-control test, distinct from independent contractors.
Definition
A common-law employee is anyone who performs services for an employer who has the right to control what work is done and how it is done. A Solo 401(k) sponsor that hires a common-law employee who works 1,000+ hours per year and is age 21+ generally must offer plan eligibility, ending the one-participant status that allows Form 5500-EZ.
Why it matters
For IRS Form 5500-EZ, this term helps decide which records, dates, values, or review questions belong in the packet.
How the tool uses it
Solo 5500 treats this as a review signal. The user enters the facts, checks the source-linked explanation, reviews the packet, and files through the official channel when the supported case still fits.
When to check the source
Check the official source when the answer depends on eligibility, late filing relief, official correspondence, valuation, or a fact you cannot verify from your own records.
Source and review date
Last reviewed: . Use the linked source for the official wording behind this term.
Official source: IRS Form 5500-EZ filing notices