My caregiver (domestic worker) says shes an independent contractor and doesn want taxes withheld. Can I do that?
The simple answer is no. The IRS has strict guidelines to define employees and independent contractors (Refer to IRS Publication 926). Caregivers and other domestics are generally considered employees. It does not matter how the employee refers to herself or how you refer to her in an employment contract. You are obligated for all payroll tax filings and remittances.
