"The main difference between W2 and 1099 workers is that a W2 is a payroll employee and a 1099 is a non-payroll worker. The names “W2 employee” and “1099 worker” come from their respective tax forms.
Every tax season, employers file a Form W2 to the IRS on behalf of their payroll staff. Companies that pay freelancers and contractors must issue a Form 1099-MISC to non-payroll workers. Both forms indicate the amount of money earned from the company within the given year. For W2 employees, it also includes employer-withheld taxes.
The differences between W2 and 1099 workers go beyond how they file taxes. In the eyes of the law and the tax authority, each type of employee has a different relationship with its employer."