A W-2 reports wages paid to an employee, with taxes withheld. A 1099-NEC reports payments to an independent contractor, with nothing withheld. Which one applies depends on the working relationship, not on what the parties call it.
W-2: employee, employer withholds and pays half of payroll tax. 1099: contractor, no withholding, contractor pays full self-employment tax and deducts business expenses on Schedule C.
Misclassifying an employee as a contractor is a payroll tax exposure for the business and a surprise self-employment tax bill for the worker. The IRS and states look at control over the work, not the label.
Yes, for different work or different payers. The same work for the same company is one or the other.
Source: IRS Publication 15-A; IRS common-law rules for worker classification
Last reviewed September 17, 2026. Tax rules change; confirm current law before acting.
A confidential consultation. Tell us what you have, and we will tell you what applies and what it costs.
Hourly billing, estimated up front, with a deposit applied to the work.
Fill this out and we will reach out to schedule your consultation.
