1099 Contractor in Montana with a Tennessee Client: Where Do You File?
Answer
The client's state is irrelevant here twice over. Tennessee does not tax personal income, and even if it did, a client's mailing address does not by itself source your income to that state. Montana taxes the profit as resident income.
Last verified
Self-employment income from personal services is sourced to the place where the services are performed. You perform them in Montana; Tennessee would have no claim even if it levied an income tax, which it does not.
What you file
- 1Quarterly estimated payments · Montana
Make quarterly estimated payments to Montana Department of Revenue — nothing is withheld from a 1099.
- 2Resident return · Montana
File a Montana resident return reporting your full self-employment income.
The two states, side by side
| Montana | Tennessee | |
|---|---|---|
| Taxes wages | Yes — graduated | No |
| Reciprocity partners | 1 (Form MW-4) | None |
| Convenience rule | No | No |
| Nonresident return | Form 2 with the nonresident/part-year schedule | Not applicable |
| Credit for other-state tax | Form 2 (credit for income tax paid to another state) | No income tax |
| Nonresident safe harbour | None published | Not applicable |
| Local income tax | No | No |
| Revenue department | Montana Department of Revenue | Tennessee Department of Revenue |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in Tennessee and working in Montana 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: Montana → TennesseeHome state only
- Remote worker: Montana → TennesseeHome state only
- Moved mid-year: Montana → TennesseeOne part-year return — the state you left
Other Montana pairs
Questions people actually ask
I live in Montana and my client is in Tennessee. Do I have to file a Tennessee tax return?
The client's state is irrelevant here twice over. Tennessee does not tax personal income, and even if it did, a client's mailing address does not by itself source your income to that state. Montana taxes the profit as resident income.
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 Tennessee hold an agreement makes no difference to a self-employed filer — sourcing rules decide the answer instead.
How current is this?
The Montana and Tennessee rules on this page were last checked against Montana Department of Revenue 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.
- Montana Department of Revenue — individual income taxaccessed 2026-08-07
- Tennessee Department of Revenue — individual income taxaccessed 2026-08-07