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 York, 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 outlined in the Internal Revenue Code (26 U.S.C. §3509), which specifies that an independent contractor is responsible for their own tax withholdings and FICA taxes, not the client. The agreement should be in writing to ensure clarity and provide legal protection for both parties. It typically includes a description of the services to be performed (scope of work), the duration of the project or service (terms and length), payment arrangements (including fee deposits and billing procedures), and often contains clauses related to confidentiality, non-solicitation, and how disputes will be resolved. While New York State does not mandate specific content for these agreements, it is crucial that the terms clearly establish the independent nature of the relationship to avoid misclassification, which can lead to legal and financial penalties for the client.