1099 Contractor in Tennessee with a Kentucky Client: Where Do You File?
Answer
Tennessee taxes nothing, and Kentucky taxes you only if you work there. Living in Tennessee means no resident return at all. A Kentucky client does not create a Kentucky filing obligation by itself — physically performing services inside Kentucky does, and then only for that portion.
Last verified
Two things make this pairing simple. Tennessee levies no personal income tax, so there is no resident return; and Kentucky taxes nonresidents only on services actually performed inside Kentucky, which for a fully remote contractor is normally nothing.
Kentucky publishes no de minimis day count or dollar floor for nonresidents. Any Kentucky-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 Kentucky Department of Revenue nonresident instructions before filing.
What you file
- 1Nonresident return · KentuckyForm 740-NP
File a Kentucky nonresident return only for income from services you physically performed in Kentucky. Tennessee does not tax wage or self-employment income.
The two states, side by side
| Tennessee | Kentucky | |
|---|---|---|
| Taxes wages | No | Yes — flat |
| Reciprocity partners | None | 7 (Form 42A809) |
| Convenience rule | No | No |
| Nonresident return | Not applicable | Form 740-NP |
| Credit for other-state tax | No income tax | Schedule ITC |
| Nonresident safe harbour | Not applicable | None published |
| Local income tax | No | Yes |
| Revenue department | Tennessee Department of Revenue | Kentucky Department of Revenue |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in Kentucky 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 → KentuckyWork state only
- Remote worker: Tennessee → KentuckyNo state income tax on your wages
- Moved mid-year: Tennessee → KentuckyOne part-year return — the state you moved to
Other Tennessee pairs
Questions people actually ask
I live in Tennessee and my client is in Kentucky. Do I have to file a Kentucky tax return?
Tennessee taxes nothing, and Kentucky taxes you only if you work there. Living in Tennessee means no resident return at all. A Kentucky client does not create a Kentucky filing obligation by itself — physically performing services inside Kentucky does, and then only for that portion.
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 Kentucky hold an agreement makes no difference to a self-employed filer — sourcing rules decide the answer instead.
How current is this?
The Tennessee and Kentucky rules on this page were last checked against Tennessee Department of Revenue and Kentucky 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
- Kentucky Department of Revenue — individual income taxaccessed 2026-08-07