An independent contractor agreement—also known as a 1099 agreement or freelance contract—is a contract between a client willing to pay for the performance of services by a contractor (person, sole-proprietor, or single-member LLC) who is willing to perform the services. Under the Internal Revenue Code (26 U.S.C. §3509), an independent contractor is not an employee, and the client hiring an independent contractor is not responsible for tax withholdings and payment of FICA taxes. An independent contractor agreement should be in writing, and will usually address issues such as the (1) scope of the work (description of the services); (2) terms and length of the project or service; (3) payment details, including fee deposits and billing procedure; and (4) confidentiality, non-solicitation, and dispute resolution clauses.

In Kentucky, as in other states, an independent contractor agreement is a legal document that outlines the terms of a working relationship between a client and a contractor who is not considered an employee. This distinction is important for tax purposes, as outlined in the Internal Revenue Code (26 U.S.C. §3509), which specifies that clients are not responsible for withholding taxes or paying FICA taxes for independent contractors. In Kentucky, while there is no specific statute that governs the content of independent contractor agreements, it is advisable to have a written contract to provide clarity and legal protection for both parties. The agreement typically includes details such as the scope of work, project duration, payment terms, and clauses related to confidentiality, non-solicitation, and how disputes will be resolved. It's important to accurately classify a worker as an independent contractor, as misclassification can lead to legal and financial penalties. Businesses and contractors may consult with an attorney to ensure their agreement complies with applicable laws and properly reflects their intentions.