1099 Contractor in Hawaii with a South Dakota Client: Where Do You File?
Answer
Hawaii gets it, South Dakota cannot. A 1099 has no withholding, so the money arrives whole and the tax is yours to pay in instalments. South Dakota has no wage or income tax to apply to a nonresident contractor, and Hawaii taxes residents on everything they earn.
Last verified
Nothing is withheld from a 1099, so the tax that a W-2 employee never sees is money you are holding on someone else's behalf. In this pairing all of it belongs to Hawaii, and none of it to South Dakota.
What you file
- 1Quarterly estimated payments · Hawaii
Make quarterly estimated payments to Hawaii Department of Taxation — nothing is withheld from a 1099.
- 2Resident return · Hawaii
File a Hawaii resident return reporting your full self-employment income.
The two states, side by side
| Hawaii | South Dakota | |
|---|---|---|
| Taxes wages | Yes — graduated | No |
| Reciprocity partners | None | None |
| Convenience rule | No | No |
| Nonresident return | Form N-15 | Not applicable |
| Credit for other-state tax | Schedule CR | No income tax |
| Nonresident safe harbour | None published | Not applicable |
| Local income tax | No | No |
| Revenue department | Hawaii Department of Taxation | South Dakota Department of Revenue |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in South Dakota and working in Hawaii gives:Client state only, 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: Hawaii → South DakotaHome state only
- Remote worker: Hawaii → South DakotaHome state only
- Moved mid-year: Hawaii → South DakotaOne part-year return — the state you left
Other Hawaii pairs
Questions people actually ask
I live in Hawaii and my client is in South Dakota. Do I have to file a South Dakota tax return?
Hawaii gets it, South Dakota cannot. A 1099 has no withholding, so the money arrives whole and the tax is yours to pay in instalments. South Dakota has no wage or income tax to apply to a nonresident contractor, and Hawaii taxes residents on everything they earn.
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 Hawaii and South Dakota hold an agreement makes no difference to a self-employed filer — sourcing rules decide the answer instead.
How current is this?
The Hawaii and South Dakota rules on this page were last checked against Hawaii Department of Taxation and South Dakota Department of Revenue 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.
- Hawaii Department of Taxation — individual income taxaccessed 2026-08-07
- South Dakota Department of Revenue — individual income taxaccessed 2026-08-07