1099 Contractor in Tennessee with a Indiana Client: Where Do You File?
Answer
Indiana only, and only for on-site work. Nothing is withheld from a 1099, and Tennessee levies no income tax, so the single question is whether any of the services were performed in Indiana. If none were, no Indiana nonresident return is required.
Last verified
Two things make this pairing simple. Tennessee levies no personal income tax, so there is no resident return; and Indiana taxes nonresidents only on services actually performed inside Indiana, which for a fully remote contractor is normally nothing.
Indiana publishes no de minimis day count or dollar floor for nonresidents. Any Indiana-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 Indiana Department of Revenue nonresident instructions before filing.
What you file
- 1Nonresident return · IndianaForm IT-40PNR
File a Indiana nonresident return only for income from services you physically performed in Indiana. Tennessee does not tax wage or self-employment income.
The two states, side by side
| Tennessee | Indiana | |
|---|---|---|
| Taxes wages | No | Yes — flat |
| Reciprocity partners | None | 5 (Form WH-47) |
| Convenience rule | No | No |
| Nonresident return | Not applicable | Form IT-40PNR |
| Credit for other-state tax | No income tax | Schedule 6 (Form IT-40PNR) |
| Nonresident safe harbour | Not applicable | None published |
| Local income tax | No | Yes |
| Revenue department | Tennessee Department of Revenue | Indiana Department of Revenue |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in Indiana and working in Tennessee 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: Tennessee → IndianaWork state only
- Remote worker: Tennessee → IndianaNo state income tax on your wages
- Moved mid-year: Tennessee → IndianaOne part-year return — the state you moved to
Other Tennessee pairs
Questions people actually ask
I live in Tennessee and my client is in Indiana. Do I have to file a Indiana tax return?
Indiana only, and only for on-site work. Nothing is withheld from a 1099, and Tennessee levies no income tax, so the single question is whether any of the services were performed in Indiana. If none were, no Indiana nonresident return is required.
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 Tennessee and Indiana hold an agreement makes no difference to a self-employed filer — sourcing rules decide the answer instead.
How current is this?
The Tennessee and Indiana rules on this page were last checked against Tennessee Department of Revenue and Indiana 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.
- Tennessee Department of Revenue — individual income taxaccessed 2026-08-07
- Indiana Department of Revenue — individual income taxaccessed 2026-08-07