All Things Tax

All Things Tax

Like the title says, from the filing process and tax questions to tax policy and reform, you can search and share All Things Tax here. This is the place to find answers to all your general questions that don't fall under the other categories. And just a reminder: questions about software or online filing should be posted in DIY Products.

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Pioneer
Posts: 1
Registered: ‎02-03-2015

1099 contractors working in multiple states

I had a subcontractor/1099-misc recipient work in two different states this year.  Do I separate the money earned by state and file a 1099-misc with each state, in addition to the federal 1099?  If so, is it ok that $ amount filed to each state will differ from the amount shown on Copy 1 of the Federal 1099?  Is there a way to fix this?  Thanks

 

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Tax Pro
Posts: 6,070
Registered: ‎02-23-2016

Re: 1099 contractors working in multiple states

Hi dev95ils,

 

 

 

Welcome to the H&R Block community.

 

Yes, you must report your 1099-MISC income earned in each state to that state, so you will have at least 2 state tax returns.

 

You must report 100% of your income to your resident state, but you must also report income earned in other states to those states on a non-resident tax return.

  • If the states have a reciprocity agreement then you only need to report your income to your resident state.
  • If the states do not have a reciprocity agreement then you'll be able to take a credit for tax paid to your non-resident state on your tax return for your resident state.

 

Which states are we talking about?

 

If the 1099-MISC you receive does not tell you how much you earned in each state then you can determine the amount you must report to your non-resident state(s) by the following formula:

 

(days worked in non-resident state / total days worked all year) * your 1099-MISC income

 

 

The income amount on your federal tax return will be your total income, so you will have a state return that shows less income if you have a non-resident state.

 

 

PART-YEAR RESIDENT

If you have two part-year resident states then you'll report the portion of the 1099-MISC income earned while you were a resident of each state to that state.  Non-resident income is reported the same way as above, you just have to be careful because you have two resident states (each for part of the year) with this scenario, so your total income earned during your time as a resident has to be reported to each resident state.

 

 

 

If you have any other questions I'll be glad to help.

 

Louis,

Senior Tax Advisor (Tampa, FL)