A 1099 worker is an independent contractor who works as an individual, such as a freelancer or sole proprietor, and is paid directly by the client. A Corp-to-Corp (C2C) contractor operates through a registered business entity such as an LLC or S-Corporation, meaning your company pays their business rather than them personally. The key differences lie in business setup, tax responsibilities, liability protection, and how payments are structured.

In some cases, yes. C2C contractors registered as an S-Corporation can split their income into a salary and distributions, with self-employment tax (15.3%) only applying to the salary portion. 1099 workers pay self-employment tax on all their net earnings. However, a C2C setup only makes financial sense for contractors consistently earning over $60,000 in net annual profits, since the costs of incorporation and payroll management can outweigh the tax savings below that threshold.