1099 Contractor in Illinois with a New Mexico 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 Illinois keeps it Illinois-source and Illinois-taxed. Travel to New Mexico to work and that portion becomes New Mexico-source, needing a New Mexico 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.
New Mexico publishes no de minimis day count or dollar floor for nonresidents. Any New Mexico-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 New Mexico Taxation and Revenue Department nonresident instructions before filing.
What you file
- 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.
- 2Nonresident return · New MexicoForm PIT-1 with Schedule PIT-B
File a New Mexico nonresident return only if you performed services inside New Mexico. New Mexico publishes no de minimis day count or dollar floor for nonresidents. Any New Mexico-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 New Mexico Taxation and Revenue Department nonresident instructions before filing.
- 3Resident return · IllinoisSchedule CR
File the Illinois resident return last and claim the credit for any tax paid to New Mexico.
The two states, side by side
| Illinois | New Mexico | |
|---|---|---|
| Taxes wages | Yes — flat | Yes — graduated |
| Reciprocity partners | 4 (Form IL-W-5-NR) | None |
| Convenience rule | No | No |
| Nonresident return | Form IL-1040 with Schedule NR | Form PIT-1 with Schedule PIT-B |
| Credit for other-state tax | Schedule CR | Form PIT-1 (credit for taxes paid to another state) |
| Nonresident safe harbour | 30 days | None published |
| Local income tax | No | No |
| Revenue department | Illinois Department of Revenue | New Mexico Taxation and Revenue Department |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in New Mexico and working in Illinois 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: Illinois → New MexicoBoth states — credit offsets the double tax
- Remote worker: Illinois → New MexicoHome state only
- Moved mid-year: Illinois → New MexicoTwo part-year returns
Other Illinois pairs
Questions people actually ask
I live in Illinois and my client is in New Mexico. Do I have to file a New Mexico 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 Illinois keeps it Illinois-source and Illinois-taxed. Travel to New Mexico to work and that portion becomes New Mexico-source, needing a New Mexico 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 Illinois and New Mexico hold an agreement makes no difference to a self-employed filer — sourcing rules decide the answer instead.
How current is this?
The Illinois and New Mexico rules on this page were last checked against Illinois Department of Revenue and New Mexico Taxation and Revenue Department 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.
- Illinois Department of Revenue — individual income taxaccessed 2026-08-07
- New Mexico Taxation and Revenue Department — individual income taxaccessed 2026-08-07