1099 Contractor in Montana with a New Mexico Client: Where Do You File?
Answer
Montana taxes all of it; New Mexico taxes only what you earn on its soil. Nothing is withheld from a 1099, so you pay Montana quarterly. A New Mexico client alone creates no New Mexico filing obligation — performing services inside New Mexico does, and Montana 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 New Mexico is measured in days on the ground rather than in invoices sent.
New Mexico publishes no de minimis day count or dollar floor for nonresidents. Any New Mexico-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 New Mexico Taxation and Revenue Department nonresident instructions before filing.
What you file
- 1Quarterly estimated payments · Montana
Make quarterly estimated payments to Montana Department of Revenue on your full self-employment income — nothing is withheld from a 1099.
- 2Nonresident return · New MexicoForm PIT-1 with Schedule PIT-B
File a New Mexico nonresident return only if you performed services inside New Mexico. New Mexico publishes no de minimis day count or dollar floor for nonresidents. Any New Mexico-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 New Mexico Taxation and Revenue Department nonresident instructions before filing.
- 3Resident return · MontanaForm 2 (credit for income tax paid to another state)
File the Montana resident return last and claim the credit for any tax paid to New Mexico.
The two states, side by side
| Montana | New Mexico | |
|---|---|---|
| Taxes wages | Yes — graduated | Yes — graduated |
| Reciprocity partners | 1 (Form MW-4) | None |
| Convenience rule | No | No |
| Nonresident return | Form 2 with the nonresident/part-year schedule | Form PIT-1 with Schedule PIT-B |
| Credit for other-state tax | Form 2 (credit for income tax paid to another state) | Form PIT-1 (credit for taxes paid to another state) |
| Nonresident safe harbour | None published | None published |
| Local income tax | No | No |
| Revenue department | Montana Department of Revenue | New Mexico Taxation and Revenue Department |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in New Mexico and working in Montana 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: Montana → New MexicoBoth states — credit offsets the double tax
- Remote worker: Montana → New MexicoHome state only
- Moved mid-year: Montana → New MexicoTwo part-year returns
Other Montana pairs
Questions people actually ask
I live in Montana and my client is in New Mexico. Do I have to file a New Mexico tax return?
Montana taxes all of it; New Mexico taxes only what you earn on its soil. Nothing is withheld from a 1099, so you pay Montana quarterly. A New Mexico client alone creates no New Mexico filing obligation — performing services inside New Mexico does, and Montana 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 Montana and New Mexico hold an agreement makes no difference to a self-employed filer — sourcing rules decide the answer instead.
How current is this?
The Montana and New Mexico rules on this page were last checked against Montana Department of Revenue and New Mexico Taxation and Revenue Department 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.
- Montana Department of Revenue — individual income taxaccessed 2026-08-07
- New Mexico Taxation and Revenue Department — individual income taxaccessed 2026-08-07