Door Dash is a delivery food service platform in the US. Door Dash takes food delivery orders from customers, partner with lots of restaurants, and offer delivery gigs on their platform. A customer can choose to order from Door Dash or work as an independent contractor (door dasher). Door Dash is required by the internal revenue service to provide tax forms to all employees, one of these tax forms is the W-2 tax form. A W-2 tax form shows employees the income earned from the employer, the amount of tax withheld, and the benefits provided in addition to other important information for the year ( health insurance and allocated tips). Let us know ‘Does Door Dash Send You A W-2?’.
A W-2 must be sent by the employer on the 31st of January the following year. The employee needs this form to file his/her federal and state taxes. Getting a W-2 form as an employee comes with some benefits, but also some requirements. A company can only send a W-2 to the employee if he earns a minimum annual income of $600.
Door Dash provides delivery gigs for people but employs them as independent contractors. An independent contractor does not receive the same tax form and is not entitled to the same tax withheld benefits that an employee receives. So, therefore, Door Dash does not give Door dashers a W-2 form, they send a 1099-NEC (non-employee compensation) form. The 1099-NEC is used by most businesses to indicate payments or money earned by independent contractors, freelancers, the self-employed, etc. This form differs greatly from the W-2, it offers different benefits and doesn’t hold taxes for the independent contractor.
The Difference Between a W-2 and 1099-NEC Tax form in Door Dash
The differences between the W-2 and 1099-NEC tax forms used by Door Dash are highlighted below.
- A W-2 tax form is given to an employee of a company by the employer. On the other hand, the 1099-NEC form is given only to independent contractors, freelancers, and the self-employed. Door Dashers are independent contractors, not employees.
- The W-2 shows the salary received by the employee and the tax withheld for social security and Medicare taxes. The 1099-NEC records only the payments that were received by the independent contractors with no tax withheld and benefits. Door dashers are not entitled to receive benefits enjoyed by employees.
- Using a W-2 tax form puts the employer under a financial obligation to his employees, an employer will be mandated to provide compensations, health insurance benefits, and even paid sick leaves to his employees. Which he will add to the W-2 form at the end of the year. An independent contractor is not entitled to such benefits from his employer. The q1099-NEC only records financial payments made by the employer to the independent contractor for the job done.
- An employee with a W-2 tax form is bound to work when the boss says so. An independent contractor is permitted to work at his convenience or schedule. Door dashers can work whenever they want, they earn per delivery carried out and receive weekly payments.
- Most businesses use to 1099-NEC form because they employ the services of an independent contractor. As it is less costly than working with an employee. Door Dash gives the 1099-NEC to their delivery drivers because they are not their legally employed staff but independent contractors.
Reasons why Door Dash does not send a W-2
W-2 forms are used to record the annual payment received by an employee. Most businesses do not use a W-2 because of the requirements, cost, and extra benefits they have to give to their employees. Businesses adopt the use of the 1099-NEC because it is less costly to work with an independent contractor.
A W-2 form will require that the employers include the salary paid, the amount held from social security and Medicare taxes, health insurance, allocated tips, and benefits received by the employee within a year. Although both the W-2 and the 1099-NEC are meant to report income earned by employees through the tax year, they still differ based on the circumstances of the type of employment they are used.
Do Door dashers receive a W-2 form?
Door Dash delivery gigs are optional and available on the app. Delivery drivers or door dashers are not an employee under door dash, they’re considered independent contractors. As an independent contractor, they can’t receive a W-2 form from Door Dash.
When does door dash send the tax form?
All companies or businesses are mandated to send all employees the tax form on January 31st of the new year. Door dashers are to expect their tax form sent to their email with all reports of earnings of the year included therein. Door dashers can only receive this tax form when they earn a minimum annual income of $600 and above. So door dash does not send a tax form if your annual income from them was not up to $600.
Conclusion
The meaning and differences between W-2 and the 1099-NEC form used by the door dash have been elaborated. Therefore, the door dash does not send a W-2 except to an employee, but sends a 1099-NEC to their independent contractors, for example, the delivery drivers or door dashers.
Frequently Asked Questions
- Can I earn from Door Dash?
Door Dash is a food delivery service that partners with different restaurants. Customers can choose to order from Door Dash or work as delivery drivers. To earn from Door Dash you’d need to sign up on their app, get approved as a delivery driver, then start taking delivery orders.
- Is a door dasher an employee of Door Dash?
A door dasher works under Door dash but the nature of his employment is an independent contractor. Door dashers earn from Door Dash as independent contractors.
- Is the W-2 form better than the 1099-NEC tax form?
Both forms are used based on different circumstances and employment. They have their benefits, but most businesses choose to use the 1099-NEC form because it is more cost-effective.
