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 Washington State, 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-to-business relationship and maintains control over how their work is performed, without the hiring entity's direct oversight. Independent contractors in Washington 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, as misclassification can lead to legal consequences, including penalties and back taxes. Washington State may have specific criteria and tests, such as the Economic Reality Test or the ABC Test, to determine worker status under state law, which can differ from federal guidelines. Employers should consult with an attorney or review state regulations to ensure compliance with both state and federal laws regarding worker classification.