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

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

Answer

Illinois taxes all of it; Virginia taxes only what you earn on its soil. Nothing is withheld from a 1099, so you pay Illinois quarterly. A Virginia client alone creates no Virginia filing obligation — performing services inside Virginia does, and Illinois then credits that tax.

Last verified

The client's location is the wrong thing to track. What matters is where you were sitting when you did the work — which is why a contractor's exposure to Virginia is measured in days on the ground rather than in invoices sent.

Virginia publishes no de minimis day count or dollar floor for nonresidents. Any Virginia-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 Virginia Department of Taxation 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 · VirginiaForm 763

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

  3. 3Resident return · IllinoisSchedule CR

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

The two states, side by side

 IllinoisVirginia
Taxes wagesYes — flatYes — graduated
Reciprocity partners4 (Form IL-W-5-NR)5 (Form VA-4)
Convenience ruleNoNo
Nonresident returnForm IL-1040 with Schedule NRForm 763
Credit for other-state taxSchedule CRSchedule OSC
Nonresident safe harbour30 daysNone published
Local income taxNoNo
Revenue departmentIllinois Department of RevenueVirginia Department of Taxation
Last verified

The other direction

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

Virginia 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 Virginia. Do I have to file a Virginia tax return?

Illinois taxes all of it; Virginia taxes only what you earn on its soil. Nothing is withheld from a 1099, so you pay Illinois quarterly. A Virginia client alone creates no Virginia filing obligation — performing services inside Virginia does, and Illinois then credits that tax.

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 Virginia hold an agreement makes no difference to a self-employed filer — sourcing rules decide the answer instead.

How current is this?

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