1099 Contractor in Michigan with a Delaware Client: Where Do You File?
Answer
Pay Michigan by instalments, and watch your Delaware days. Reciprocity agreements do not help here: every one of them covers wage withholding, and a 1099 has no withholding to switch off. Michigan taxes the full profit, Delaware taxes the on-site share, and the Michigan credit reconciles them.
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.
Delaware publishes no de minimis day count or dollar floor for nonresidents. Any Delaware-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 Delaware Division of Revenue nonresident instructions before filing.
What you file
- 1Quarterly estimated payments · Michigan
Make quarterly estimated payments to Michigan Department of Treasury on your full self-employment income — nothing is withheld from a 1099.
- 2Nonresident return · DelawareForm PIT-NON
File a Delaware nonresident return only if you performed services inside Delaware. Delaware publishes no de minimis day count or dollar floor for nonresidents. Any Delaware-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 Delaware Division of Revenue nonresident instructions before filing.
- 3Resident return · MichiganForm MI-1040 (credit for income tax imposed by another state)
File the Michigan resident return last and claim the credit for any tax paid to Delaware.
The two states, side by side
| Michigan | Delaware | |
|---|---|---|
| Taxes wages | Yes — flat | Yes — graduated |
| Reciprocity partners | 6 (Form MI-W4) | None |
| Convenience rule | No | Yes — general rule |
| Nonresident return | Form MI-1040 with Schedule NR | Form PIT-NON |
| Credit for other-state tax | Form MI-1040 (credit for income tax imposed by another state) | Schedule I (Form PIT-RES) |
| Nonresident safe harbour | None published | None published |
| Local income tax | Yes | Yes |
| Revenue department | Michigan Department of Treasury | Delaware Division of Revenue |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in Delaware and working in Michigan 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: Michigan → DelawareBoth states — credit offsets the double tax
- Remote worker: Michigan → DelawareConvenience-of-the-employer rule — both states tax you
- Moved mid-year: Michigan → DelawareTwo part-year returns
Other Michigan pairs
Questions people actually ask
I live in Michigan and my client is in Delaware. Do I have to file a Delaware tax return?
Pay Michigan by instalments, and watch your Delaware days. Reciprocity agreements do not help here: every one of them covers wage withholding, and a 1099 has no withholding to switch off. Michigan taxes the full profit, Delaware taxes the on-site share, and the Michigan credit reconciles them.
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 Michigan and Delaware hold an agreement makes no difference to a self-employed filer — sourcing rules decide the answer instead.
How current is this?
The Michigan and Delaware rules on this page were last checked against Michigan Department of Treasury and Delaware Division 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.
- Michigan Department of Treasury — individual income taxaccessed 2026-08-07
- Delaware Division of Revenue — individual income taxaccessed 2026-08-07