1099 Contractor in New Hampshire with a Alabama Client: Where Do You File?
Answer
New Hampshire taxes nothing, and Alabama taxes you only if you work there. Living in New Hampshire means no resident return at all. A Alabama client does not create a Alabama filing obligation by itself — physically performing services inside Alabama does, and then only for that portion.
Last verified
The most common contractor worry — that invoicing an out-of-state client creates a filing obligation there — is usually unfounded. What creates the obligation is physical presence, and New Hampshire residents have no home-state return in any case.
Alabama publishes no de minimis day count or dollar floor for nonresidents. Any Alabama-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 Alabama Department of Revenue nonresident instructions before filing.
What you file
- 1Nonresident return · AlabamaForm 40NR
File a Alabama nonresident return only for income from services you physically performed in Alabama. New Hampshire does not tax wage or self-employment income.
The two states, side by side
| New Hampshire | Alabama | |
|---|---|---|
| Taxes wages | No | Yes — graduated |
| Reciprocity partners | None | None |
| Convenience rule | No | No |
| Nonresident return | Not applicable | Form 40NR |
| Credit for other-state tax | No income tax | Schedule CR |
| Nonresident safe harbour | Not applicable | None published |
| Local income tax | No | Yes |
| Revenue department | New Hampshire Department of Revenue Administration | Alabama Department of Revenue |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in Alabama and working in New Hampshire gives:Home state only — estimated payments.
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: New Hampshire → AlabamaWork state only
- Remote worker: New Hampshire → AlabamaNo state income tax on your wages
- Moved mid-year: New Hampshire → AlabamaOne part-year return — the state you moved to
Other New Hampshire pairs
Questions people actually ask
I live in New Hampshire and my client is in Alabama. Do I have to file a Alabama tax return?
New Hampshire taxes nothing, and Alabama taxes you only if you work there. Living in New Hampshire means no resident return at all. A Alabama client does not create a Alabama filing obligation by itself — physically performing services inside Alabama does, and then only for that portion.
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 New Hampshire and Alabama hold an agreement makes no difference to a self-employed filer — sourcing rules decide the answer instead.
How current is this?
The New Hampshire and Alabama rules on this page were last checked against New Hampshire Department of Revenue Administration and Alabama 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.
- New Hampshire Department of Revenue Administration — individual income taxaccessed 2026-08-07
- Alabama Department of Revenue — individual income taxaccessed 2026-08-07