1099 Contractor in New Jersey with a South Dakota Client: Where Do You File?
Answer
Only New Jersey taxes you, and nobody withholds. South Dakota levies no personal income tax, so a South Dakota client creates no South Dakota obligation whatever. You make quarterly estimated payments to New Jersey on the profit and report it on a New Jersey resident return.
Last verified
Nothing is withheld from a 1099, so the tax that a W-2 employee never sees is money you are holding on someone else's behalf. In this pairing all of it belongs to New Jersey, and none of it to South Dakota.
What you file
- 1Quarterly estimated payments · New Jersey
Make quarterly estimated payments to New Jersey Division of Taxation — nothing is withheld from a 1099.
- 2Resident return · New Jersey
File a New Jersey resident return reporting your full self-employment income.
The two states, side by side
| New Jersey | South Dakota | |
|---|---|---|
| Taxes wages | Yes — graduated | No |
| Reciprocity partners | 1 (Form NJ-165) | None |
| Convenience rule | Only against convenience-rule states | No |
| Nonresident return | Form NJ-1040NR | Not applicable |
| Credit for other-state tax | Schedule NJ-COJ | No income tax |
| Nonresident safe harbour | None published | Not applicable |
| Local income tax | No | No |
| Revenue department | New Jersey Division of Taxation | South Dakota Department of Revenue |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in South Dakota and working in New Jersey 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: New Jersey → South DakotaHome state only
- Remote worker: New Jersey → South DakotaHome state only
- Moved mid-year: New Jersey → South DakotaOne part-year return — the state you left
Other New Jersey pairs
Questions people actually ask
I live in New Jersey and my client is in South Dakota. Do I have to file a South Dakota tax return?
Only New Jersey taxes you, and nobody withholds. South Dakota levies no personal income tax, so a South Dakota client creates no South Dakota obligation whatever. You make quarterly estimated payments to New Jersey on the profit and report it on a New Jersey resident 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 New Jersey and South Dakota hold an agreement makes no difference to a self-employed filer — sourcing rules decide the answer instead.
How current is this?
The New Jersey and South Dakota rules on this page were last checked against New Jersey Division of Taxation and South Dakota 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 Jersey Division of Taxation — individual income taxaccessed 2026-08-07
- New Jersey Division of Taxation — Convenience of the Employer Ruleaccessed 2026-08-07
- South Dakota Department of Revenue — individual income taxaccessed 2026-08-07