Tax Terms in US Staffing

Tax Terms in The US Staffing | C2C | W2 | 1099 | US IT Technical Recruiter |Technical Recruiter | Talent Acquisition Specialist | US Staffing

Basically, US IT Recruitment works with Tax Term Corp to Corp, W2 and 1099

Detailed Information

1. 1. Contract - Corp-to-Corp
Definition of C2C: Any employment where the contact is between 2 corporations (companies) is called C2C (Corp-to-Corp).

In other words, in The C2C (Corp to Corp) the client, a corporation (company), pays the business entity of a US Citizen or Green Card Holder, which is organized as a corporation, for the services rendered).

C2C(Corp-to-Corp) employment contracts can happen in 2 cases.

Case – I: If Any U.S. Citizen or Green Card Holder can Register (incorporate) a company. Usually, US people register a company to avail of tax benefits or save tax.

Case – II: Second case of C2C when a client company hires a consultant with an H-1B VISA.

Payment Terms of C2C: In the C2C scenario the client company pays the consultant’s company directly and does not deduct any tax amount, as payment of tax is the liability of the corporation rendering services, etc.

2. Contract – W2

Definition of W2: This is the simplest option of all other options. There is no need for bookkeeping in other options like Corp-to-Corp and 1099. In this case, the contractor's wages are subject to the same tax withholdings as a regular employee of the client.

In some cases, the approximate percentage of benefits and taxes is about 12.5 to 15% percent.

3. Contract – Independent (1099)

Definition of 1099: This is actually a sole proprietorship an incorporated business that is owned by one individual. 1099 is the simplest form of business organization to start and maintain. This type of business has no existence other than the owner. Its liabilities are the owner’s personal liabilities.

Payment Terms of 1099: In this scenario(Independent-1099) the client company pays directly to the independent contractor and does not withhold any tax amount.

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