Skip to content
statelinetax.comChecker

1099 Contractor in Illinois with a Indiana Client: Where Do You File?

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

Answer

Illinois always, Indiana sometimes. With no withholding on a 1099 the whole tax is yours to manage: estimate to Illinois through the year, and file a Indiana nonresident return for any income from work you physically performed in Indiana, claiming the credit back on the Illinois 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.

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

What you file

  1. 1Quarterly estimated payments · Illinois

    Make quarterly estimated payments to Illinois Department of Revenue on your full self-employment income — nothing is withheld from a 1099.

  2. 2Nonresident return · IndianaForm IT-40PNR

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

  3. 3Resident return · IllinoisSchedule CR

    File the Illinois resident return last and claim the credit for any tax paid to Indiana.

The two states, side by side

 IllinoisIndiana
Taxes wagesYes — flatYes — flat
Reciprocity partners4 (Form IL-W-5-NR)5 (Form WH-47)
Convenience ruleNoNo
Nonresident returnForm IL-1040 with Schedule NRForm IT-40PNR
Credit for other-state taxSchedule CRSchedule 6 (Form IT-40PNR)
Nonresident safe harbour30 daysNone published
Local income taxNoYes
Revenue departmentIllinois Department of RevenueIndiana Department of Revenue
Last verified

The other direction

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

Indiana to Illinois →

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 Illinois pairs

Questions people actually ask

I live in Illinois and my client is in Indiana. Do I have to file a Indiana tax return?

Illinois always, Indiana sometimes. With no withholding on a 1099 the whole tax is yours to manage: estimate to Illinois through the year, and file a Indiana nonresident return for any income from work you physically performed in Indiana, claiming the credit back on the Illinois 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 Illinois and Indiana hold an agreement makes no difference to a self-employed filer — sourcing rules decide the answer instead.

How current is this?

The Illinois and Indiana rules on this page were last checked against Illinois Department of Revenue and Indiana 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.