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1099 Contractor in Idaho with a Kentucky Client: Where Do You File?

Home state, plus the client state if you work thereNo withholding — 1099

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 Idaho keeps it Idaho-source and Idaho-taxed. Travel to Kentucky to work and that portion becomes Kentucky-source, needing a Kentucky 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.

Kentucky publishes no de minimis day count or dollar floor for nonresidents. Any Kentucky-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 Kentucky Department of Revenue nonresident instructions before filing.

What you file

  1. 1Quarterly estimated payments · Idaho

    Make quarterly estimated payments to Idaho State Tax Commission on your full self-employment income — nothing is withheld from a 1099.

  2. 2Nonresident return · KentuckyForm 740-NP

    File a Kentucky nonresident return only if you performed services inside Kentucky. Kentucky publishes no de minimis day count or dollar floor for nonresidents. Any Kentucky-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 Kentucky Department of Revenue nonresident instructions before filing.

  3. 3Resident return · IdahoForm 39NR

    File the Idaho resident return last and claim the credit for any tax paid to Kentucky.

The two states, side by side

 IdahoKentucky
Taxes wagesYes — flatYes — flat
Reciprocity partnersNone7 (Form 42A809)
Convenience ruleNoNo
Nonresident returnForm 43Form 740-NP
Credit for other-state taxForm 39NRSchedule ITC
Nonresident safe harbourNone publishedNone published
Local income taxNoYes
Revenue departmentIdaho State Tax CommissionKentucky Department of Revenue
Last verified

The other direction

Reversing the commute does not always reverse the answer. Living in Kentucky and working in Idaho gives:Home state, plus the client state if you work there.

Kentucky to Idaho →

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.

Other Idaho pairs

Questions people actually ask

I live in Idaho and my client is in Kentucky. Do I have to file a Kentucky 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 Idaho keeps it Idaho-source and Idaho-taxed. Travel to Kentucky to work and that portion becomes Kentucky-source, needing a Kentucky 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 Idaho and Kentucky hold an agreement makes no difference to a self-employed filer — sourcing rules decide the answer instead.

How current is this?

The Idaho and Kentucky rules on this page were last checked against Idaho State Tax Commission and Kentucky 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.