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1099 Contractor in Nebraska with a Arizona 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 Nebraska keeps it Nebraska-source and Nebraska-taxed. Travel to Arizona to work and that portion becomes Arizona-source, needing a Arizona 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.

Arizona publishes no de minimis day count or dollar floor for nonresidents. Any Arizona-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 Arizona Department of Revenue nonresident instructions before filing.

What you file

  1. 1Quarterly estimated payments · Nebraska

    Make quarterly estimated payments to Nebraska Department of Revenue on your full self-employment income — nothing is withheld from a 1099.

  2. 2Nonresident return · ArizonaForm 140NR

    File a Arizona nonresident return only if you performed services inside Arizona. Arizona publishes no de minimis day count or dollar floor for nonresidents. Any Arizona-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 Arizona Department of Revenue nonresident instructions before filing.

  3. 3Resident return · NebraskaForm 1040N Schedule II

    File the Nebraska resident return last and claim the credit for any tax paid to Arizona.

The two states, side by side

 NebraskaArizona
Taxes wagesYes — graduatedYes — graduated
Reciprocity partnersNoneNone
Convenience ruleYes — general ruleNo
Nonresident returnForm 1040N with Schedule IIIForm 140NR
Credit for other-state taxForm 1040N Schedule IIForm 309
Nonresident safe harbourNone publishedNone published
Local income taxNoNo
Revenue departmentNebraska Department of RevenueArizona Department of Revenue
Last verified

The other direction

Reversing the commute does not always reverse the answer. Living in Arizona and working in Nebraska gives:Home state, plus the client state if you work there.

Arizona to Nebraska →

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 Nebraska pairs

Questions people actually ask

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

How current is this?

The Nebraska and Arizona rules on this page were last checked against Nebraska Department of Revenue and Arizona 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.