surrogacy independent contractor
Surrogacy Independent Contractor Status: Taxes and What to Know
As a surrogacy independent contractor, you get a 1099 instead of a W-2. Here is what that means for your taxes, deductions, and take-home pay.
Quick Answer
- Surrogates are classified as independent contractors — you receive a 1099, not a W-2
- No taxes are withheld from surrogate compensation, so you may need to pay quarterly estimated taxes
- Some surrogacy-related expenses may be deductible — a tax professional familiar with surrogacy can identify these
- Rocky Mountain Surrogacy can refer you to tax professionals who specialize in surrogate income
Why Surrogates Are Independent Contractors
A surrogacy independent contractor is not employed by the agency. You are not on the intended parents' payroll either. You are your own party in a legal deal.
No one takes taxes from your pay. No income tax or Social Security is held back. You get the full amount in your contract.
The IRS calls you an independent contractor when you control your own work. Surrogacy fits this because you run your own daily life.
That means you get a 1099 form at tax time. You do not get a W-2. The 1099 shows the total pay you got that year.
Rocky Mountain Surrogacy has used this surrogacy independent contractor model since 2007. See the surrogate compensation breakdown.
You receive a 1099 at tax time. No taxes are withheld from your surrogate compensation payments.
How Estimated Taxes Work for Surrogates
Since no taxes are withheld, you may owe taxes at the end of the year. The IRS expects you to pay estimated taxes if you will owe more than a certain amount.
Estimated taxes are paid four times a year. The due dates are in April, June, September, and January. You send a payment to the IRS each quarter.
This sounds complicated but it is straightforward. Many surrogates work with a tax professional who handles the math. The cost of a tax advisor is often worth it.
You can also set aside a portion of each payment yourself for taxes. That keeps you prepared.
The key is to plan ahead. Do not wait until April to think about taxes. Start setting money aside from your first payment. Our surrogate tax guide walks you through the details. The IRS also has forms and guides for self-employed workers.
- Receive your surrogate compensation with no taxes withheld
- Set aside a portion of each payment for taxes
- Pay estimated taxes quarterly — April, June, September, January
- Work with a tax professional to file accurately at year end
Expenses You May Be Able to Track
As a surrogacy independent contractor, some costs may be tax write-offs. Rules change, so check with a tax pro.
Many surrogates track gas to doctor visits. Prenatal vitamins and new clothes may count too. Save every receipt you get.
Trips to the fertility clinic are worth noting. Even if parents pay you back, the records help at tax time.
Use a folder or an app to store receipts. Many surrogates snap photos with their phone. It takes seconds.
The IRS has guidance for self-employed workers on what counts as a deductible expense — mileage, medical-related costs, and clinic travel among them.
Rocky Mountain Surrogacy does not give tax advice. But the team can link you to pros who know surrogacy taxes well.
Mileage, vitamins, maternity clothes, and clinic travel may be deductible per IRS rules for self-employed taxpayers. A tax professional can sort out what counts.
Apply and Start Earning as a Surrogate
You now know how surrogacy independent contractor taxes work. That is a smart start. Now take the next step.
You must be 21 to 38. You need a healthy BMI and one past birth. You must be a non-smoker and a U.S. citizen or resident.
Right now, parents are on a waitlist. There are not enough surrogates. Your choice to apply could change a life.
The agency works with all kinds of parents. That includes families from the UK, Canada, Spain, and more.
Check the surrogate qualifications and apply to be a surrogate today.
Intended parents are on a waitlist. Your application could bring a family's dream to life.
Frequently Asked Questions
Do surrogates get a W-2 or 1099?
Surrogates receive a 1099 form and are classified as independent contractors. No taxes are withheld from Rocky Mountain Surrogacy surrogate payments.
Do I have to pay estimated taxes on surrogate compensation?
You may need to pay quarterly estimated taxes if you will owe more than a threshold amount at year end. A tax professional familiar with surrogacy can help you calculate the right amount.
What surrogacy expenses can I deduct?
Some expenses like mileage, maternity clothing, and prenatal vitamins may be deductible under IRS rules for self-employed taxpayers. Tax rules vary, so work with a surrogacy-experienced tax professional for your specific situation.
How much do surrogates earn?
Rocky Mountain Surrogacy pays first-time surrogates $60,000 base compensation plus a $300 monthly allowance. Repeat surrogates earn $70,000 base, with all additional benefits included.
Does the agency withhold any taxes from my pay?
No — as an independent contractor, you receive the full compensation amount. Rocky Mountain Surrogacy can refer you to tax professionals who know how to manage surrogate income.