1099 Taxes in Connecticut: What Freelancers and Contractors Owe

Are you self-employed for tax purposes?

If a client pays you as an independent contractor rather than an employee, you're in business for yourself in the IRS's eyes, even if it's a side gig. Clients usually ask for a Form W-9 and may send you a Form 1099-NEC after the year ends.

Two things trip people up:

• No 1099 doesn't mean no tax. You owe tax on all your business income, whether or not you get a form. For payments made in 2026, clients generally only have to send a 1099-NEC once they've paid you $2,000 or more (it was $600 for 2025 payments), so many smaller jobs won't come with one.
• A single-member LLC doesn't change this. Unless it elects to be taxed as an S-Corp, a one-owner LLC is taxed just like a sole proprietor. Profit goes on Schedule C of your personal return.

The three taxes on 1099 income

1. Self-employment tax (federal)

This is Social Security and Medicare for people who work for themselves. An employer would normally pay half and take the other half from your check; when you're self-employed, you pay both halves.

• It applies if your net self-employment earnings are $400 or more.
• The rate is 15.3%: 12.4% for Social Security and 2.9% for Medicare.
• It's figured on 92.35% of your net profit, not 100%.
• The Social Security part stops at the 2026 wage base of $184,500 (combined with any W-2 wages). Medicare has no cap, and an extra 0.9% Medicare tax applies above $200,000 for single filers ($250,000 married filing jointly).
• You get to deduct half of your self-employment tax when figuring your income tax.

2. Federal income tax

Your business profit is added to any other income and taxed at your normal federal rates, after deductions. Many self-employed people may also qualify for the qualified business income (QBI) deduction, which can deduct up to 20% of qualified business income, subject to limits.

3. Connecticut income tax

Connecticut taxes your profit as part of your regular state income tax. Connecticut doesn't have a separate state self-employment tax, and cities and towns don't charge their own income tax. For 2026, Connecticut's rates run from 2% to 6.99%. For a single filer, for example, the first $10,000 of taxable income is taxed at 2%, income from $10,000 to $50,000 at 4.5%, and income from $50,000 to $100,000 at 5.5%, with higher rates above that. Higher earners also gradually lose the benefit of the lower brackets.

A worked example (made-up numbers)

Jordan is a single freelance designer in Connecticut with $60,000 of net profit in 2026 after business expenses, and no other job.

• Self-employment tax: $60,000 × 92.35% = $55,410. $55,410 × 15.3% = about $8,478.
• Deduction for half of it: about $4,239 comes off Jordan's income before federal income tax.
• Federal and Connecticut income tax: figured on what's left after that deduction, the standard deduction, and any QBI deduction. These depend on Jordan's full situation, which is why we built a calculator rather than guessing.

A common rule of thumb is to set aside roughly 25% to 30% of profit for all three taxes. Treat that as a starting point, not an answer: your number depends on your filing status, other income and deductions. Plug in your own numbers in the quarterly estimated tax calculator, which estimates federal income tax, self-employment tax and Connecticut income tax together.

Deductions that lower the bill

You pay tax on profit, not on everything you bill. Ordinary and necessary business costs come off first, and every dollar of expense also lowers self-employment tax. Common ones for Connecticut freelancers:

• Home office, if you use part of your home regularly and only for business. Compare the simplified and regular methods with the home office deduction calculator.
• Business driving: trips to clients and job sites (not your regular commute). Track miles as you go and estimate the deduction with the mileage deduction calculator.
• Equipment, software and supplies you use for the business.
• Health insurance premiums may be deductible if you're self-employed and not eligible for an employer plan. See our guide to self-employed health insurance in Connecticut.
• Professional costs: business licenses, professional dues, and the business share of phone and internet.

Keep receipts and a simple log. If the IRS ever asks, records are what back up a deduction. Our tax document checklists include a self-employed and 1099 list.

Paying during the year

Because nothing is withheld, the IRS and Connecticut both expect quarterly estimated payments if you'll owe $1,000 or more. For 2026, they're due April 15, June 15 and September 15, 2026, and January 15, 2027. Our guide to Connecticut estimated tax payments explains how much is enough and how to pay on myconneCT and IRS Direct Pay.

If you also have a W-2 job, having extra tax withheld from your paycheck (Form W-4 for federal, Form CT-W4 for Connecticut) can cover some or all of your 1099 tax instead.

Other Connecticut details

• Sales tax: some services and most goods are taxable in Connecticut. If what you sell is taxable, you need a sales and use tax permit from DRS ($100) before you make sales. Many professional services don't need one; check with DRS if you're unsure.
• Hiring help: if you start paying others, the contractor-or-employee question matters. Compare the real cost with the 1099 vs. W-2 cost calculator.
• Forming an LLC: it doesn't lower your taxes by itself, but it's a common next step. See how to start an LLC in Connecticut, and if profit grows, when an S-Corp might pay off.