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

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

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 Kentucky keeps it Kentucky-source and Kentucky-taxed. Travel to Virginia to work and that portion becomes Virginia-source, needing a Virginia 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.

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 · 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 · 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 · KentuckySchedule ITC

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

The two states, side by side

 KentuckyVirginia
Taxes wagesYes — flatYes — graduated
Reciprocity partners7 (Form 42A809)5 (Form VA-4)
Convenience ruleNoNo
Nonresident returnForm 740-NPForm 763
Credit for other-state taxSchedule ITCSchedule OSC
Nonresident safe harbourNone publishedNone published
Local income taxYesNo
Revenue departmentKentucky 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 Kentucky gives:Home state, plus the client state if you work there.

Virginia 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 Virginia. Do I have to file a Virginia 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 Kentucky keeps it Kentucky-source and Kentucky-taxed. Travel to Virginia to work and that portion becomes Virginia-source, needing a Virginia 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 Kentucky and Virginia hold an agreement makes no difference to a self-employed filer — sourcing rules decide the answer instead.

How current is this?

The Kentucky and Virginia rules on this page were last checked against Kentucky 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.