Form 8952: The Voluntary Classification Settlement Program
Published November 7, 2026
Some businesses treat workers as independent contractors and report their pay on Form 1099-NEC. If the business later decides those workers should be employees, the Voluntary Classification Settlement Program (VCSP) is one IRS option. Form 8952 is the application for it.
The instructions for Form 8952 (Rev. November 2025) explain the rules. This post is general information, not advice about a specific business.
What the program does
The VCSP gives eligible taxpayers a way to reclassify workers as employees for federal employment tax purposes. Those taxes cover income tax withholding, Social Security and Medicare (FICA) taxes, and federal unemployment (FUTA) tax. The change applies to future tax periods.
The program is optional. A taxpayer who meets the requirements applies, then enters into a closing agreement with the IRS. The instructions describe the result as limited federal employment tax liability for past treatment of the workers as nonemployees.
Eligibility in plain terms
On Form 8952 the taxpayer must certify each of these points:
- It wants to reclassify certain workers as employees for future periods.
- It now treats those workers as nonemployees, and has treated them that way consistently.
- It filed all required Forms 1099 for each worker for the 3 calendar years before the Form 8952 is filed. For a newer business, the test covers the years the workers worked for it.
- It has no current dispute with the IRS about whether the workers are nonemployees or employees.
- It is not under an employment tax examination by the IRS. If it is part of an affiliated group, no member of the group may be under examination.
- It is not under examination by the Department of Labor or a state agency about how these workers are classified.
- If the IRS or the Department of Labor examined the same workers before, it complied with the results and is not contesting them in court.
Who signs
The taxpayer signs under penalties of perjury. A representative may not sign for the taxpayer. A sole proprietor signs personally. A corporation or LLC taxed as a corporation signs through an officer, such as the president, a vice president, the treasurer, or the chief accounting officer. A partnership signs through a partner. The taxpayer must have an employer identification number (EIN) before the form is filed.
Timing
File Form 8952 at any time, but file it at least 120 days before the date you want to start treating the workers as employees. For example, to start on January 1, 2027, file at least 120 days before that date.
Do not send payment with Form 8952. The instructions say payment is made later, with a signed closing agreement. Sending payment with the form may delay processing.
What to attach
- A statement that lists the names and social security numbers of all workers to be reclassified.
- A description of each class of workers.
- Form 2848, if a representative will deal with the IRS for you. On that form, the description of matter is "Voluntary Classification Settlement Program."
How the payment is figured
Part IV of the form uses the total compensation paid to the workers in the most recent full calendar year. The instructions then apply the section 3509(a) rates to that compensation. The steps are set out in the instructions, and the amount is paid only after the IRS accepts the application and you sign the closing agreement.
Checklist
- Confirm that every required Form 1099 was filed for each worker in the look-back period.
- Build the list of worker names and social security numbers before you sign.
- Pick a start date that is at least 120 days after you file.
- Get an EIN before filing.
- Read the 1099 basics for contractors. See Gig Work and Form 1099-NEC: How to Report Your 2025 Income.
Sources: Sources: IRS, Instructions for Form 8952 (Rev. November 2025) (https://www.irs.gov/pub/irs-prior/i8952--2025.pdf) This is general information, not advice about your specific return.
