1099 Contractor in Illinois with a Tennessee Client: Where Do You File?
Answer
Illinois gets it, Tennessee cannot. A 1099 has no withholding, so the money arrives whole and the tax is yours to pay in instalments. Tennessee has no wage or income tax to apply to a nonresident contractor, and Illinois 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 Illinois, and none of it to Tennessee.
What you file
- 1Quarterly estimated payments · Illinois
Make quarterly estimated payments to Illinois Department of Revenue — nothing is withheld from a 1099.
- 2Resident return · Illinois
File a Illinois resident return reporting your full self-employment income.
The two states, side by side
| Illinois | Tennessee | |
|---|---|---|
| Taxes wages | Yes — flat | No |
| Reciprocity partners | 4 (Form IL-W-5-NR) | None |
| Convenience rule | No | No |
| Nonresident return | Form IL-1040 with Schedule NR | Not applicable |
| Credit for other-state tax | Schedule CR | No income tax |
| Nonresident safe harbour | 30 days | Not applicable |
| Local income tax | No | No |
| Revenue department | Illinois Department of Revenue | Tennessee Department of Revenue |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in Tennessee and working in Illinois 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: Illinois → TennesseeHome state only
- Remote worker: Illinois → TennesseeHome state only
- Moved mid-year: Illinois → TennesseeOne part-year return — the state you left
Other Illinois pairs
Questions people actually ask
I live in Illinois and my client is in Tennessee. Do I have to file a Tennessee tax return?
Illinois gets it, Tennessee cannot. A 1099 has no withholding, so the money arrives whole and the tax is yours to pay in instalments. Tennessee has no wage or income tax to apply to a nonresident contractor, and Illinois 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 Illinois and Tennessee hold an agreement makes no difference to a self-employed filer — sourcing rules decide the answer instead.
How current is this?
The Illinois and Tennessee rules on this page were last checked against Illinois Department of Revenue and Tennessee 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.
- Illinois Department of Revenue — individual income taxaccessed 2026-08-07
- Tennessee Department of Revenue — individual income taxaccessed 2026-08-07