Worker classification tests, 1099-NEC filing obligations, and Freelance Worker Protection Acts vary by state, and sometimes by city, agency, and industry. This is the whole picture in one place. Tap a state, pick a layer, plan accordingly.
27 states use the full ABC test to classify workers, 6 use a modified version, and 18 use a common law control test. Three states have Freelance Worker Protection Acts: New York (Aug 2024), Illinois (Jul 2024), and California (Jan 2025), all requiring written contracts and payment within about 30 days. 1099-NEC state filing splits four ways: nine no tax states require nothing, New York wants federal only, about 20 states file conditionally on withholding, and the rest require direct filing with the state.
Every tile is a state. The color is the answer for the layer you have selected. Click one and the full breakdown for that state appears here. Or scroll down, where all 51 jurisdictions are written out in full for the humans and machines who prefer reading.
Every state has to answer the same question: is this person an employee or an independent contractor? The answer decides who pays employment taxes, who gets overtime and unemployment coverage, and who is on the hook when it goes wrong. States answer it three different ways.
The full ABC test, used by 27 states, presumes everyone is an employee unless the hiring party proves three things at once: (A) the worker is free from control and direction, (B) the work is outside the usual course of the hiring party's business, and (C) the worker runs an independently established trade or business. Prong B is the killer. A freelance motion designer doing motion design for a brand's in house creative team is, by any honest reading, inside the usual course of business. Massachusetts applies the strictest version. California codified it through AB 5 with a stack of professional services exemptions. New Jersey enforces it with some of the largest audits in the country.
Six states, including Colorado, Pennsylvania, and Wisconsin, use a modified ABC test that drops prong B. The remaining 18, including New York, Texas, and Florida, use a common law control test that weighs who directs the work without any presumption of employment.
One more complication, because there is always one more: most states apply different tests for different purposes. The same worker can be a contractor for the IRS, an employee for state unemployment insurance, and a coin flip for workers compensation. A signed contractor agreement settles none of it. Every test, in every state, looks at how the relationship actually operates.
New York City passed the first Freelance Isn't Free Act in 2017. The idea was simple: freelancers should get a written contract and get paid on time, and there should be consequences when they don't. It worked well enough that it spread. Minneapolis followed in 2021, Seattle and Columbus in 2022, Los Angeles in 2023.
Then the states came in. Illinois passed its Freelance Worker Protection Act effective July 1, 2024, covering work of $500 or more in a 120 day window. New York took its city law statewide effective August 28, 2024, at an $800 threshold, with enforcement moved to the Attorney General and civil penalties up to $25,000 for pattern violations. California followed with SB 988 effective January 1, 2025, at a $250 threshold covering the professional services list from Labor Code 2778: marketing, graphic design, content, HR, fine art, most of the enterprise creative stack.
The mechanics rhyme across all of them. Written contract required, with itemized services, rates, and payment dates. Payment due by the contract date or within 30 days of completion. No demanding a discount as a condition of timely payment. No retaliation. Double damages for nonpayment, plus attorney fees, which changed the economics of small dollar disputes overnight. Enforcement is real: New York City recovered over half a million dollars from a single production company in early 2026.
If your company hires freelancers in New York, Illinois, or California, and it does, then every engagement over the threshold needs a compliant written contract before work starts. An email thread does not count in your favor. It counts against you, since these laws treat informal communications as evidence a contract existed on the freelancer's terms.
Federal filing is the easy part: 1099-NEC to the IRS by January 31 for nonemployee compensation over the threshold, which moved from $600 to $2,000 for payments made on or after January 1, 2026. The state layer is where it gets baroque.
Nine states require nothing, because they have no income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. New York requires federal filing only, a rare mercy. About 20 states require filing only when state tax was withheld, and many of those are satisfied by the Combined Federal/State Filing program, where the IRS forwards your forms automatically. The rest require direct filing with the state through their own portals, on their own deadlines, sometimes at their own thresholds. Massachusetts wants everything through MassTaxConnect regardless of CF/SF. Oregon wants iWire filings even with zero withholding. Michigan refuses 1099-NEC through CF/SF entirely. Oklahoma starts at $750, New Jersey at $1,000, and Wisconsin and Mississippi kept their $600 thresholds when the federal number moved.
Where a freelancer lives, where the work happened, and where your company sits can each trigger a different state's rules. A creative team paying 40 freelancers across 15 states is not doing one January filing. It is doing a project.
Basil is a vendor of record for enterprise creative and marketing teams. Basil enters your procurement system as a single approved vendor, then handles freelancer onboarding, compliant SOWs that satisfy the New York, Illinois, and California contract requirements, invoicing, payment on Net 15 to 30 terms, and 1099-NEC issuance and filing across every state on this map. Your team works with the freelancers. Basil does the part you just read three sections about.
Teams that use Basil run their freelance programs this way.
The same data behind the map, written out state by state: the classification test, the freelance protection law status, and the 1099-NEC filing obligation. Verified July 2026.
As of 2026, 27 states apply the full ABC test, including California, Massachusetts, New Jersey, Illinois, and Connecticut. Six more, including Colorado, Pennsylvania, and Wisconsin, use a modified version that drops prong B. The remaining 18 states, including New York, Texas, and Florida, use a common law control test. The catch: most states apply different tests for unemployment insurance, wage law, and workers compensation, so a worker can be a contractor for one agency and an employee for another in the same state.
Three states have statewide laws: New York's Freelance Isn't Free Act (effective August 28, 2024, $800 threshold), Illinois's Freelance Worker Protection Act (effective July 1, 2024, $500 threshold), and California's Freelance Worker Protection Act (effective January 1, 2025, $250 threshold). Cities with their own ordinances include New York City (since 2017), Minneapolis, Seattle, Columbus, and Los Angeles. All of them require written contracts and payment within roughly 30 days of completion, with double damages for nonpayment.
It depends on the state. Nine states with no income tax require nothing. New York requires federal filing only. Roughly 20 states require filing only when state tax was withheld, often satisfied through the Combined Federal/State Filing program. The rest require direct filing with the state revenue department through their own portals, on their own deadlines, sometimes with their own thresholds. Massachusetts, Oregon, Michigan, and DC all require direct filing regardless of CF/SF participation.
The ABC test presumes a worker is an employee unless the hiring party proves all three prongs: the worker is free from control, the work is outside the company's usual course of business, and the worker runs an independently established business. The common law test flips the posture and weighs control factors without a presumption. Prong B is what makes the ABC test hard for creative and marketing teams, because a freelance designer doing design work for a design driven company is, by definition, inside the usual course of business.
Back taxes, unpaid overtime and benefits, unemployment and workers compensation contributions, and penalties at both federal and state levels. State exposure is usually the bigger number. New Jersey and California run some of the most aggressive misclassification audit programs in the country, and a written contractor agreement does not settle the question anywhere. Every test looks at how the relationship actually operates.
It consolidates them. A vendor of record like Basil becomes the contracting party and the 1099 payor, which means one vendor in procurement instead of dozens of individual contractor setups, one party responsible for written contracts that satisfy FWPA requirements in New York, Illinois, and California, and one party handling 1099-NEC filing across every state's rules. Classification risk still has to be managed honestly, but the paperwork stops multiplying by headcount.