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1099 Contractor in North Dakota with a Illinois Client: Where Do You File?

Home state, plus the client state if you work thereNo withholding — 1099

Answer

Pay North Dakota by instalments, and watch your Illinois days. Reciprocity agreements do not help here: every one of them covers wage withholding, and a 1099 has no withholding to switch off. North Dakota taxes the full profit, Illinois taxes the on-site share, and the North Dakota credit reconciles them.

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.

Illinois allows a 30-day safe harbour before the obligation attaches. Illinois does not require an employer to withhold from a nonresident who works in Illinois for 30 or fewer days in the year. The day count is a withholding safe harbour; a nonresident who exceeds it owes Illinois tax on the Illinois-source wages.

What you file

  1. 1Quarterly estimated payments · North Dakota

    Make quarterly estimated payments to North Dakota Office of State Tax Commissioner on your full self-employment income — nothing is withheld from a 1099.

  2. 2Nonresident return · IllinoisForm IL-1040 with Schedule NR

    File a Illinois nonresident return only if you performed services inside Illinois. Illinois does not require an employer to withhold from a nonresident who works in Illinois for 30 or fewer days in the year. The day count is a withholding safe harbour; a nonresident who exceeds it owes Illinois tax on the Illinois-source wages.

  3. 3Resident return · North DakotaSchedule ND-1CR

    File the North Dakota resident return last and claim the credit for any tax paid to Illinois.

The two states, side by side

 North DakotaIllinois
Taxes wagesYes — graduatedYes — flat
Reciprocity partners2 (Form NDW-R)4 (Form IL-W-5-NR)
Convenience ruleNoNo
Nonresident returnForm ND-1 with Schedule ND-1NRForm IL-1040 with Schedule NR
Credit for other-state taxSchedule ND-1CRSchedule CR
Nonresident safe harbourNone published30 days
Local income taxNoNo
Revenue departmentNorth Dakota Office of State Tax CommissionerIllinois Department of Revenue
Last verified

The other direction

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

Illinois to North Dakota →

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 North Dakota pairs

Questions people actually ask

I live in North Dakota and my client is in Illinois. Do I have to file a Illinois tax return?

Pay North Dakota by instalments, and watch your Illinois days. Reciprocity agreements do not help here: every one of them covers wage withholding, and a 1099 has no withholding to switch off. North Dakota taxes the full profit, Illinois taxes the on-site share, and the North Dakota credit reconciles them.

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 Dakota and Illinois hold an agreement makes no difference to a self-employed filer — sourcing rules decide the answer instead.

How current is this?

The North Dakota and Illinois rules on this page were last checked against North Dakota Office of State Tax Commissioner and Illinois 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.