1099 Contractor in South Dakota with a Minnesota Client: Where Do You File?
Answer
The client's address is not the test. South Dakota has no personal income tax, so nothing is owed at home; Minnesota taxes nonresidents on income from services performed within Minnesota, so if you never travel there to work, there is nothing to file. Days on site change that.
Last verified
Two things make this pairing simple. South Dakota levies no personal income tax, so there is no resident return; and Minnesota taxes nonresidents only on services actually performed inside Minnesota, which for a fully remote contractor is normally nothing.
Minnesota publishes no de minimis day count or dollar floor for nonresidents. Any Minnesota-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 Minnesota Department of Revenue nonresident instructions before filing.
What you file
- 1Nonresident return · MinnesotaForm M1 with Schedule M1NR
File a Minnesota nonresident return only for income from services you physically performed in Minnesota. South Dakota does not tax wage or self-employment income.
The two states, side by side
| South Dakota | Minnesota | |
|---|---|---|
| Taxes wages | No | Yes — graduated |
| Reciprocity partners | None | 2 (Form MWR) |
| Convenience rule | No | No |
| Nonresident return | Not applicable | Form M1 with Schedule M1NR |
| Credit for other-state tax | No income tax | Schedule M1CR |
| Nonresident safe harbour | Not applicable | None published |
| Local income tax | No | No |
| Revenue department | South Dakota Department of Revenue | Minnesota Department of Revenue |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in Minnesota and working in South Dakota 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: South Dakota → MinnesotaWork state only
- Remote worker: South Dakota → MinnesotaNo state income tax on your wages
- Moved mid-year: South Dakota → MinnesotaOne part-year return — the state you moved to
Other South Dakota pairs
Questions people actually ask
I live in South Dakota and my client is in Minnesota. Do I have to file a Minnesota tax return?
The client's address is not the test. South Dakota has no personal income tax, so nothing is owed at home; Minnesota taxes nonresidents on income from services performed within Minnesota, so if you never travel there to work, there is nothing to file. Days on site change that.
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 South Dakota and Minnesota hold an agreement makes no difference to a self-employed filer — sourcing rules decide the answer instead.
How current is this?
The South Dakota and Minnesota rules on this page were last checked against South Dakota Department of Revenue and Minnesota 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.
- South Dakota Department of Revenue — individual income taxaccessed 2026-08-07
- Minnesota Department of Revenue — individual income taxaccessed 2026-08-07