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

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

Answer

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

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 Michigan is measured in days on the ground rather than in invoices sent.

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

What you file

  1. 1Quarterly estimated payments · Kentucky

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

  2. 2Nonresident return · MichiganForm MI-1040 with Schedule NR

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

  3. 3Resident return · KentuckySchedule ITC

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

The two states, side by side

 KentuckyMichigan
Taxes wagesYes — flatYes — flat
Reciprocity partners7 (Form 42A809)6 (Form MI-W4)
Convenience ruleNoNo
Nonresident returnForm 740-NPForm MI-1040 with Schedule NR
Credit for other-state taxSchedule ITCForm MI-1040 (credit for income tax imposed by another state)
Nonresident safe harbourNone publishedNone published
Local income taxYesYes
Revenue departmentKentucky Department of RevenueMichigan Department of Treasury
Last verified

The other direction

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

Michigan to Kentucky →

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 Kentucky pairs

Questions people actually ask

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

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

How current is this?

The Kentucky and Michigan rules on this page were last checked against Kentucky Department of Revenue and Michigan Department of Treasury 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.