1099 Contractor in Delaware with a Michigan Client: Where Do You File?
Answer
The client's location does not decide this. Self-employment income from personal services is sourced to where the work happens, so working from Delaware keeps it Delaware-source and Delaware-taxed. Travel to Michigan to work and that portion becomes Michigan-source, needing a Michigan nonresident return.
Last verified
Reciprocity agreements are the first thing contractors ask about and the first thing that does not apply to them. Every agreement in the country is a wage-withholding arrangement, and a 1099 has no withholding to switch off.
Michigan publishes no de minimis day count or dollar floor for nonresidents. Any Michigan-source wage income above the state's general filing threshold requires a nonresident return, and that threshold is reset each year — check the current figure on the Michigan Department of Treasury nonresident instructions before filing.
What you file
- 1Quarterly estimated payments · Delaware
Make quarterly estimated payments to Delaware Division of Revenue on your full self-employment income — nothing is withheld from a 1099.
- 2Nonresident return · MichiganForm MI-1040 with Schedule NR
File a Michigan nonresident return only if you performed services inside Michigan. Michigan publishes no de minimis day count or dollar floor for nonresidents. Any Michigan-source wage income above the state's general filing threshold requires a nonresident return, and that threshold is reset each year — check the current figure on the Michigan Department of Treasury nonresident instructions before filing.
- 3Resident return · DelawareSchedule I (Form PIT-RES)
File the Delaware resident return last and claim the credit for any tax paid to Michigan.
The two states, side by side
| Delaware | Michigan | |
|---|---|---|
| Taxes wages | Yes — graduated | Yes — flat |
| Reciprocity partners | None | 6 (Form MI-W4) |
| Convenience rule | Yes — general rule | No |
| Nonresident return | Form PIT-NON | Form MI-1040 with Schedule NR |
| Credit for other-state tax | Schedule I (Form PIT-RES) | Form MI-1040 (credit for income tax imposed by another state) |
| Nonresident safe harbour | None published | None published |
| Local income tax | Yes | Yes |
| Revenue department | Delaware Division of Revenue | Michigan Department of Treasury |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in Michigan and working in Delaware gives:Home state, plus the client state if you work there.
Same two states, different situation
The withholding answer turns on how you are paid and where the work happens, not only on which two states are involved.
- W-2 commuter: Delaware → MichiganBoth states — credit offsets the double tax
- Remote worker: Delaware → MichiganHome state only
- Moved mid-year: Delaware → MichiganTwo part-year returns
Other Delaware pairs
Questions people actually ask
I live in Delaware and my client is in Michigan. Do I have to file a Michigan tax return?
The client's location does not decide this. Self-employment income from personal services is sourced to where the work happens, so working from Delaware keeps it Delaware-source and Delaware-taxed. Travel to Michigan to work and that portion becomes Michigan-source, needing a Michigan nonresident return.
Do reciprocity agreements help a 1099 contractor?
No. Every state reciprocity agreement in the country is an arrangement about wage withholding between two revenue departments, and a 1099 has no withholding to switch off. Whether Delaware and Michigan hold an agreement makes no difference to a self-employed filer — sourcing rules decide the answer instead.
How current is this?
The Delaware and Michigan rules on this page were last checked against Delaware Division of Revenue and Michigan Department of Treasury on 2026-08-07. We re-check the full grid every December after state legislative sessions close, and re-check the convenience-of-the-employer states quarterly because that is where the rules move fastest.
Sources
Every fact above comes from the revenue department that publishes the rule. We do not cite secondary summaries, and we do not restate a figure we could not find at source.
- Delaware Division of Revenue — individual income taxaccessed 2026-08-07
- Michigan Department of Treasury — individual income taxaccessed 2026-08-07