US Tax Terms : C2C / W2 / 1099

US tax terms- usitrecruit.com

Tax Terms

Tax Terms plays a key role in US job market / USIT Recruitment so in-order to have good understanding about US recruitment ,every recruiter must have knowledge about the US Tax Terms .

Basically USIT Recruitment works on two key factors :

  1. Relationship between clients and Staffing Companies
  2. Relationship between USIT recruiters/Bench Recruiters and the management

There are three (3) Tax Terms which are generally used in US Job market.

  1. W2
  2. C2C
  3. 1099

W2

W2 is one of the US Tax Terms which is an agreement between individual and the corporation.

Tax : On W2 tax will be taken care by his/her employer as the employer withholds a part of pay.

What taxes need to be paid?

Federal income Tax

State Income Tax

Social Security Tax (SSN) Tax

Medicare Tax

For instance the person who is seeking a job opportunity with a valid work authorization (US Citizen/Green card/H1B /OPT /TN visa etc..,) is termed as consultant /Candidate.

Like wise there are some staffing agencies who take these Consultants on their bench according to the interest of the consultants .

If  a H1B candidate is on one of the staffing company (“X” ) payroll (or made an agreement with an employer for a certain period ) then this H1B Candidate is called as W2 of this (“X” ) Staffing firm

  • Only Green card /US citizen / EAD / TN Visa can work on W2 Tax Term
  • H1B are not allowed to work on W2 if they are in agreement with other employer but they are allowed to work on W2 when they are going to Transfer their Visa.
  • W2 Candidates will have basic benefits from the employers end like Medical , insurance ,PTO,401K

C2C

C2C is one of the commonly used Tax Terms in the US , which is the most preferable Tax  by most of the consultants .

C2C is an agreement between two corporations. (Not individuals). Tax will be paid by  the corporation on behalf of their consultants .

H1B is the independent visa where they need  someone to sponsor to stay in US so they will sign an agreement with their preferred staffing firm , then this staffing firm has rights to market the H1B candidate’s resume.

Any US Valid Visa can work on C2C basis.

Visa Tax Terms
H1B C2C
OPT W2/C2C
Green Card W2/C2C
US Citizen W2/C2C
TN Visa W2/C2C
H4 EAD W2/C2C
GC-EAD W2/C2C

1099

1099 is one of the rarely used tax terms in US job market as no one prefers to work on 1099

1099 is and independent contractor or freelancer where they are liable to pay their own taxes and files their payroll.

What are different US Tax Terms?

There are 3 types of tax terms i.e W2, 1099, C2C

What is the difference between W2 and C2C or Corp-to-Corp?

C2C or Corp-to-Corp is an agreement between an individual ( Valid US Visa Holder ) to a corporation.

What is the 1099 Tax Term?

When a person is paid on 1099 tax terms all the money earned by the candidate is paid on untaxed bias so, the candidate is responsible to pay the tax .

Never Get confused between w2 and 1099

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