1099 Contractor in North Carolina with a Tennessee Client: Where Do You File?
Answer
North Carolina only. Nothing about invoicing a Tennessee client changes where your work is performed, and Tennessee has no income tax in any event — so the whole obligation is North Carolina estimated payments during the year and a North Carolina resident return at the end of it.
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 North Carolina, and none of it to Tennessee.
What you file
- 1Quarterly estimated payments · North Carolina
Make quarterly estimated payments to North Carolina Department of Revenue — nothing is withheld from a 1099.
- 2Resident return · North Carolina
File a North Carolina resident return reporting your full self-employment income.
The two states, side by side
| North Carolina | Tennessee | |
|---|---|---|
| Taxes wages | Yes — flat | No |
| Reciprocity partners | None | None |
| Convenience rule | No | No |
| Nonresident return | Form D-400 with Schedule PN | Not applicable |
| Credit for other-state tax | Form D-400TC | No income tax |
| Nonresident safe harbour | None published | Not applicable |
| Local income tax | No | No |
| Revenue department | North Carolina 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 North Carolina 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: North Carolina → TennesseeHome state only
- Remote worker: North Carolina → TennesseeHome state only
- Moved mid-year: North Carolina → TennesseeOne part-year return — the state you left
Other North Carolina pairs
Questions people actually ask
I live in North Carolina and my client is in Tennessee. Do I have to file a Tennessee tax return?
North Carolina only. Nothing about invoicing a Tennessee client changes where your work is performed, and Tennessee has no income tax in any event — so the whole obligation is North Carolina estimated payments during the year and a North Carolina resident return at the end of it.
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 North Carolina and Tennessee hold an agreement makes no difference to a self-employed filer — sourcing rules decide the answer instead.
How current is this?
The North Carolina and Tennessee rules on this page were last checked against North Carolina 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.
- North Carolina Department of Revenue — individual income taxaccessed 2026-08-07
- Tennessee Department of Revenue — individual income taxaccessed 2026-08-07