1099 Contractor in Michigan with a Tennessee Client: Where Do You File?
Answer
One state, paid quarterly. Your services are performed in Michigan, which makes the income Michigan-source and Michigan-taxed; Tennessee taxes no personal income at all. Set aside for Michigan estimated payments — no client withholds anything for you.
Last verified
Self-employment income from personal services is sourced to the place where the services are performed. You perform them in Michigan; Tennessee would have no claim even if it levied an income tax, which it does not.
What you file
- 1Quarterly estimated payments · Michigan
Make quarterly estimated payments to Michigan Department of Treasury — nothing is withheld from a 1099.
- 2Resident return · Michigan
File a Michigan resident return reporting your full self-employment income.
The two states, side by side
| Michigan | Tennessee | |
|---|---|---|
| Taxes wages | Yes — flat | No |
| Reciprocity partners | 6 (Form MI-W4) | None |
| Convenience rule | No | No |
| Nonresident return | Form MI-1040 with Schedule NR | Not applicable |
| Credit for other-state tax | Form MI-1040 (credit for income tax imposed by another state) | No income tax |
| Nonresident safe harbour | None published | Not applicable |
| Local income tax | Yes | No |
| Revenue department | Michigan Department of Treasury | Tennessee Department of Revenue |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in Tennessee and working in Michigan 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: Michigan → TennesseeHome state only
- Remote worker: Michigan → TennesseeHome state only
- Moved mid-year: Michigan → TennesseeOne part-year return — the state you left
Other Michigan pairs
Questions people actually ask
I live in Michigan and my client is in Tennessee. Do I have to file a Tennessee tax return?
One state, paid quarterly. Your services are performed in Michigan, which makes the income Michigan-source and Michigan-taxed; Tennessee taxes no personal income at all. Set aside for Michigan estimated payments — no client withholds anything for you.
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 Tennessee hold an agreement makes no difference to a self-employed filer — sourcing rules decide the answer instead.
How current is this?
The Michigan and Tennessee rules on this page were last checked against Michigan Department of Treasury 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.
- Michigan Department of Treasury — individual income taxaccessed 2026-08-07
- Tennessee Department of Revenue — individual income taxaccessed 2026-08-07