An independent contractor (also known as a freelancer) is a person or entity who agrees to work for another person or entity as a nonemployee. Because of the independent contractor’s status as a nonemployee, the contractor must pay their own Social Security and Medicare (FICA) taxes. And the person or entity hiring the independent contractor has no obligation to withhold income taxes from the contractor’s fees. It is important for the person or entity who hires a worker to properly classify the worker as an employee or as an independent contractor based on the IRS’s right-to-control test.

In Connecticut, the classification of a worker as an independent contractor or an employee is a significant legal determination that affects tax obligations and labor rights. According to the IRS's right-to-control test, an independent contractor is someone who operates under a business arrangement and retains control over how their work is performed, as opposed to an employee who is subject to the employer's direction and control. Independent contractors in Connecticut are responsible for paying their own Social Security and Medicare taxes, as they are not considered employees. The hiring entity is not required to withhold income taxes from payments made to independent contractors. It is crucial for businesses to correctly classify workers to avoid legal consequences, including penalties and back taxes. Misclassification can lead to violations of state labor laws and IRS regulations. Connecticut may have specific criteria and tests, such as the 'ABC' test used for unemployment tax purposes, to determine worker status under state law, which can differ from federal guidelines.