What You Lose as a 1099 Nurse

Image of content creator sitting on a couch and smiling at camera
Written by Ayana Dunn, BSN, RN Content Writer, IntelyCare
Image of content creator for bio page
Reviewed by Aldo Zilli, Esq. Senior Manager, B2B Content, IntelyCare
A 1099 nurse reviews their contract carefully.

When most nurses imagine the workplace, it’s likely with a single employer for an indefinite period of time. However, nurse staffing agencies and travel nurses prove that working under temporary contracts or through a third party is another viable option.

Your work choice impacts far more than your daily lifestyle — it can also affect your taxes, short and long-term finances, and your healthcare options. Unlike regular employees, nurses who work as independent contractors, freelancers, and entrepreneurs are categorized as 1099 workers for tax purposes. People who choose a more traditional full-time job with a single employer are categorized as W2 employees.

There are pros and cons of independent contractor nurse jobs. Although the flexibility of a 1099 lifestyle is enticing, it can come with some unfavorable complications. Below, we describe what it means to be a 1099 nurse and the drawbacks that can arise with this tax status.

What Is 1099?

This is the tax designation used for independent contractors. In healthcare, it is often used for travel nurses or nurses who work for staffing agencies — though some agency nurses are hired as W2 employees. There are some core 1099 worker rights, primarily coming from the terms of their contract, but also based on their status as contractors, such as:

  • Right to Promised Payment: Workers are entitled to be paid on the agreed-upon dates in the contract. If the independent nurse contractor organization, staffing agency, facility, or business doesn’t uphold the payment date, the contractor can take legal action to enforce the contract.
  • Right to a Contract: All 1099 workers have a right to draft a contract; they’re not obligated to work with a company without one. For example, travel nurse contracts outline dates and scheduling, compensation, expectations, and other policies.
  • Right to Deduct Business Expenses: As contractors, 1099 workers have the right to write off expenses for tax purposes as long as it’s work-related. This can include travel, laptops, uniforms, and more.

The Drawbacks of Working as a 1099 Nurse

Many nurses enjoy the lifestyle contract work affords, such as having a flexible schedule and choice in your workplace, plus 1099 nurses also tend to get paid higher wages to make up for the lack of security a steady employer provides. Despite the benefits, 1099 workers may have more issues to juggle than W2 employees. W2 nurses are also generally entitled to a broader range of legal protections, with rights to a minimum wage, overtime, and certain workplace benefits.

Many nurses don’t realize what W2 status provides until it’s gone. It’s easy to take that for granted until you’re left to deal with the extra time and money spent as a 1099 worker. Examples of the problems that come with being a 1099 nurse are described below.

Tax Hassle

W2 nurses pay taxes yearly while 1099 nurses may have to pay taxes quarterly. Yearly tax payments are one lump sum, while smaller amounts are due for quarterly taxes. Employers save W2 employees the hassle of estimating how much of their paychecks must be withheld for taxes by deducting that amount from each check.

The checks that 1099 nurses receive don’t have federal or state taxes deducted. This can lead to an unpleasant surprise come tax season if they don’t routinely set aside money.

To sum it up: As a 1099 contractor, you’re responsible for setting aside money for taxes instead of having an employer to do it for you. Plus, you have to think about filing them four times a year instead of once.

No Benefits

W2 employees are entitled to participate in the company’s retirement, health, dental, and life insurance plans. This is a significant financial commitment for employers. In fact, the Bureau of Labor and Statistics note that benefit costs account for more than 30% of overall salary costs in private industry. 1099 nurses, on the other hand, are responsible for their own benefits, which can be considerably more expensive for individuals than through an employer.

To sum it up: You’re responsible for your health insurance and retirement savings plan as a 1099 nurse. It’s doable, but often more costly than through an employer, and sifting through all the available options can feel overwhelming.


W2 workers have a set schedule with guaranteed income. This enables W2 employees to more accurately budget for immediate and future needs. It also provides a more solid foundation upon which they can build a career and plan for unexpected costs. If you work for a staffing agency that offers W2 employment instead of 1099, you access the stability that comes from the employer benefits and worker’s rights.

To sum it up: If you work as a contractor, you don’t have the luxury to plan on future employment. It’s more difficult to think more than one step ahead, and you may need to prepare for backup employment should you ever encounter a major life change.

No Paid Time Off (PTO)

Although employers aren’t required to grant PTO, W2 employees have higher chances of getting paid time off. On top of that, W2 nurses are entitled to benefit from the Family and Medical Leave Act (FMLA) due to new parenthood, illness, and other eligible reasons to miss work for an extended period of time. As a 1099 nurse, you’ll have to eat the cost of days you miss.

To sum it up: You’ll need to make sure you have savings as back up for missed income if you are considering becoming a 1099 nurse.

Potential 1099 Employee Misclassification

As mentioned above, W2 workers are employees of a company. A 1099 designation is for people who work for themselves as independent contractors. Sometimes, however, companies treat their 1099 contractors like full-time employees, but without giving them the benefits that come with W2 employment. This has resulted in various lawsuits to protect workers and clarify what companies can and cannot expect from 1099 contractors.

For example, W2 employees must be compensated for overtime payment. Whether it’s the usual hourly rate, double, or another adjustment unique to the facility. But 1099 nurses cannot depend on that law, so they have to carefully review contracts to protect their interests. Working for an employer who offers you W2 status can help avoid that complication.

If you are working as an independent contractor and find that the employment expectations go above and beyond those required of 1099 workers, you may be able to file a wage claim. This could result in back pay for any unpaid wages during a period of misclassification.

To sum it up: Keep in mind that you must be vigilant when reviewing contracts to ensure the scope of your work is aligned with a contractor status. Don’t rely on a healthcare facility to protect your rights when they’re contracting with you.

The Choice Is Yours: W2 or 1099 Nurse?

It’s time to do what’s best for you. IntelyCare ensures our nurses enjoy the best of both worlds: flexible schedules and the benefits of W2 employment. If that sounds good to you, apply to IntelyCare today and create the schedule you want with peace of mind.

Legal Disclaimer: This article contains general legal information, but it is not intended to constitute professional legal advice for any particular situation and should not be relied on as professional legal advice. Any references to the law may not be current as laws regularly change through updates in legislation, regulation, and case law at the federal and state level. Nothing in this article should be interpreted as creating an attorney-client relationship. If you have legal questions, you should seek the advice of an attorney licensed to practice in your jurisdiction.