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Member

1099-Misc another state

Hi all,

 

I work as an independent contractor in Tennessee. One of my clients is in another state, however, they come to me in Tennessee for my services, which are rendered here and the final product is sent to their choice of destination. I receive a 1099-Misc from the clients state, and the clients state want me to pay income taxes in that state. Is this correct? I thought that I only paid taxes in the state I live and work, which happens to be Tennessee. I never cross into the other state. What does the tax law say about this? Any help would be greatly appreciated.

Thanks!

3 Comments
Catalyst V

1099-Misc another state

Apparently, your out-of-state client is not a CPA or Tax Attorney well versed in the tax laws of whatever state they are in. (You forgot to tell us.) But generally, so long as you do not have a physical business presence in another state, and do not conduct business in another state, you have no tax liability to that state. But that's "generally". It depends on the state. I would suggest that you seek the advice of a qualified tax attorney or CPA in your state of TN, instead of making decisions based on us "armchair" CPAs in this public user-to-user forum. Personally, Based on my interpretation of your post, I don't seen any tax liability for you on any legal precedent I'm aware of, to any state other than TN. But then I'm not a tax professional by any stretch of one's imagination.

 

K8
Member

1099-Misc another state

I am in agreement with Carl.
Professional tax consultants are always the best way to go.

I do feel that;
You reasonably would file your 1099 with the state of TN, for your earned income/independent services rendered.
You are not considered an “employee” of the one fella, you are simply and diligently reporting your income to the State where you operate as an independent contractor.
I’m thinking that if you accurately report your earnings to the state, and provide the name(s) of the persons that you were monetarily compensated by, that should suffice.
Again, and as Carl noted... it is always best to seek a professional tax advisor, particularly when it deals with multiple state tax laws.

Member

1099-Misc another state

My client was in the state of North Carolina, and the Department of Revenue there said any income derived from their state was taxable. I did find that strange, but I guess I have to find a CPA.