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 New Jersey, an independent contractor agreement is a legal document that outlines the terms of the working relationship between a client and a contractor who is not considered an employee. This distinction is important for tax purposes, as independent contractors are responsible for their own tax withholdings and payments, including FICA taxes, as per the Internal Revenue Code (26 U.S.C. §3509). New Jersey law requires that the criteria for classifying a worker as an independent contractor are met, which generally means the individual must be free from control or direction over the performance of their services, the service must be outside the usual course of the business for which it is performed, and the individual must be customarily engaged in an independently established trade, occupation, profession, or business. A written independent contractor agreement in New Jersey typically includes the scope of work, project duration, payment terms, and clauses related to confidentiality, non-solicitation, and dispute resolution. It's important to ensure that such agreements comply with both state and federal laws to avoid misclassification of employees as independent contractors, which can result in legal and financial penalties.