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Washington, as an IC you are also paying your employer's half of Social Security and Medicare, which is twice what you would pay as an employee. As you have stated, you are not collecting benefit hours for unemployment, but also consider that you are not covered for workman's comp in the case of an injury that an employee is entitled to. Work expenses not reimbursed by your employer continue to be tax deductible as an employee. Lastly, I am not aware of any means for a future employer to know that you have collected on employment security or workman's comp.
Your current employer is encouraging you to do this because they have learned that you have been misclassified. The status of IC's has been murky for awhile, so I believe that they are correctly changing your employee status due to greater clarity on this issue. I don't see a catch of any kind, unless they are hoping to preempt a claim for not properly classifying you to begin with. From the way you describe these people, I doubt that is the case.
Caution: I'm just a small business owner who sits worshipfully at the feet of my CPA.
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