Surrogate Income/1099 forms

Posted on: April 21st 2011

In the vast majority of surrogacy situations, the surrogate is an independent contractor, not an employee. Even if the contract indicates monies paid to the surrogate are a “gift,” for “pain and suffering,” or “pre-birth child support,” in every surrogate case that we know of which has been audited by the IRS, the surrogate was found liable for taxes . This is true regardless of how the agency categorized the income or whether they or their escrow company issued a 1099. To avoid potential penalties and interest, surrogates and intended parents should always consult an experienced tax professional before signing contracts.