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 Rhode Island, an independent contractor agreement is a legal document that outlines the terms of a working arrangement 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 indicates that clients are not responsible for withholding taxes or paying FICA taxes for independent contractors. In Rhode Island, as in other states, it is advisable for the agreement to be in writing to clearly define the scope of work, duration of the project, payment terms, and other key provisions such as confidentiality and non-solicitation clauses. The written agreement helps prevent misunderstandings and provides a legal framework for dispute resolution. It is important to accurately classify a worker as an independent contractor, as misclassification can lead to legal and financial penalties. Rhode Island may have specific criteria for determining independent contractor status, and it is recommended to consult with an attorney to ensure compliance with state and federal laws.