If you've been paying ITIN workers outside of payroll, here's the good news: 2026 isn't over yet, and it's not too late to start fixing it.
A lot of construction business owners land here the same way. A crew grows fast, a few workers get paid by check or cash, and the paperwork never quite catches up. It might have felt manageable at the time. But the closer we get to January, the fewer options you have to clean things up for this tax year.
The better move is to look at your situation now, while there's still time to act, instead of finding out you have a problem in the middle of tax season.
Here's a question worth asking today: are all of your workers being properly reported on payroll?
W-2s are due to employees and the Social Security Administration by January 31. If some of your workers have been paid outside your payroll system, those wages might not show up correctly on year-end forms. That can mean mismatched records, amended filings, and questions you'd rather not answer later.
W-2 reporting has its own identification requirements, and an ITIN isn't treated the same as a Social Security number on a W-2. That's exactly why it pays to review your setup with a payroll provider before year-end, not after.
If you've been paying workers off the books, think about what happens if you face a payroll tax audit or a Department of Labor investigation.
Auditors and investigators look at how workers were paid, whether wages and hours were recorded, and whether payroll taxes were withheld and filed. Gaps in those records can lead to back taxes, penalties, and interest.
The longer an issue goes unaddressed, the more complicated it can become. Every additional pay period paid outside payroll adds to the records that might need to be reviewed or corrected. Starting now gives you more room to understand your options.
Here's a question a lot of business owners haven't thought about. What happens if one of your workers gets injured on the job, and you've been paying them off the books?
Workers' compensation premiums are typically based on reported payroll. If some of your workers' wages were never reported, your business could face a premium audit, additional premiums, penalties, or unexpected out-of-pocket costs after an injury.
Adding a worker to payroll going forward is a good step, but it doesn't automatically fix coverage for past periods. That's why it's worth reviewing your workers' compensation reporting now, before someone gets hurt, rather than after.
At Baron Payroll, we work with construction business owners who want to get their payroll right. We'll help you review your situation, understand your obligations, and take the right next steps toward compliance.
Here's what that process can look like:
One important note: an ITIN is a tax processing number. It doesn't establish work authorization, which is why I-9 verification and a payroll tax review are part of the process before anyone is onboarded or prior payroll is corrected.
No. There's still time in 2026 to review your situation and start addressing payroll problems before year-end. The sooner you start, the more options you might have.
No. An ITIN is issued for federal tax processing and isn't a substitute for a Social Security number on a W-2. A payroll review can help you understand your reporting obligations.
No. An ITIN doesn't establish work authorization. Employers still need to complete Form I-9 employment eligibility verification for new hires.
Not automatically. Adding someone to payroll going forward doesn't guarantee coverage for earlier periods. Your insurance carrier and a payroll review can help clarify where you stand.
Risks can include payroll tax penalties, inaccurate year-end forms, issues in a Department of Labor investigation, and workers' compensation premium adjustments.
Don't wait until tax season, an audit, or an injury on the job to find out you have a problem. Use our instant price calculator to see how affordable it is to work with Baron Payroll, and find out how we can help you get your ITIN workers on payroll for 2026.
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