1099 Contractor in South Dakota with a Pennsylvania Client: Where Do You File?
Answer
One state at most. South Dakota does not tax earned income; Pennsylvania does, but only what is sourced to Pennsylvania. For a contractor working entirely from South Dakota, that source amount is normally zero regardless of where the invoices are sent.
Last verified
Two things make this pairing simple. South Dakota levies no personal income tax, so there is no resident return; and Pennsylvania taxes nonresidents only on services actually performed inside Pennsylvania, which for a fully remote contractor is normally nothing.
Pennsylvania publishes no de minimis day count or dollar floor for nonresidents. Any Pennsylvania-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 Pennsylvania Department of Revenue nonresident instructions before filing.
What you file
- 1Nonresident return · PennsylvaniaForm PA-40 (nonresident)
File a Pennsylvania nonresident return only for income from services you physically performed in Pennsylvania. South Dakota does not tax wage or self-employment income.
The two states, side by side
| South Dakota | Pennsylvania | |
|---|---|---|
| Taxes wages | No | Yes — flat |
| Reciprocity partners | None | 6 (Form REV-419) |
| Convenience rule | No | Yes — general rule |
| Nonresident return | Not applicable | Form PA-40 (nonresident) |
| Credit for other-state tax | No income tax | Schedule G-L |
| Nonresident safe harbour | Not applicable | None published |
| Local income tax | No | Yes |
| Revenue department | South Dakota Department of Revenue | Pennsylvania Department of Revenue |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in Pennsylvania 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 → PennsylvaniaWork state only
- Remote worker: South Dakota → PennsylvaniaConvenience-of-the-employer rule — employer state taxes you
- Moved mid-year: South Dakota → PennsylvaniaOne 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 Pennsylvania. Do I have to file a Pennsylvania tax return?
One state at most. South Dakota does not tax earned income; Pennsylvania does, but only what is sourced to Pennsylvania. For a contractor working entirely from South Dakota, that source amount is normally zero regardless of where the invoices are sent.
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 Pennsylvania 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 Pennsylvania rules on this page were last checked against South Dakota Department of Revenue and Pennsylvania 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
- Pennsylvania Department of Revenue — individual income taxaccessed 2026-08-07
- Pennsylvania — Form REV-419accessed 2026-08-07
- Pennsylvania Personal Income Tax Guide — Income Subject to Tax Withholdingaccessed 2026-08-07