1099 Contractor in Texas with a New Mexico Client: Where Do You File?
Answer
One state at most. Texas does not tax earned income; New Mexico does, but only what is sourced to New Mexico. For a contractor working entirely from Texas, that source amount is normally zero regardless of where the invoices are sent.
Last verified
The most common contractor worry — that invoicing an out-of-state client creates a filing obligation there — is usually unfounded. What creates the obligation is physical presence, and Texas residents have no home-state return in any case.
New Mexico publishes no de minimis day count or dollar floor for nonresidents. Any New Mexico-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 New Mexico Taxation and Revenue Department nonresident instructions before filing.
What you file
- 1Nonresident return · New MexicoForm PIT-1 with Schedule PIT-B
File a New Mexico nonresident return only for income from services you physically performed in New Mexico. Texas does not tax wage or self-employment income.
The two states, side by side
| Texas | New Mexico | |
|---|---|---|
| Taxes wages | No | Yes — graduated |
| Reciprocity partners | None | None |
| Convenience rule | No | No |
| Nonresident return | Not applicable | Form PIT-1 with Schedule PIT-B |
| Credit for other-state tax | No income tax | Form PIT-1 (credit for taxes paid to another state) |
| Nonresident safe harbour | Not applicable | None published |
| Local income tax | No | No |
| Revenue department | Texas Comptroller of Public Accounts | New Mexico Taxation and Revenue Department |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in New Mexico and working in Texas 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: Texas → New MexicoWork state only
- Remote worker: Texas → New MexicoNo state income tax on your wages
- Moved mid-year: Texas → New MexicoOne part-year return — the state you moved to
Other Texas pairs
Questions people actually ask
I live in Texas and my client is in New Mexico. Do I have to file a New Mexico tax return?
One state at most. Texas does not tax earned income; New Mexico does, but only what is sourced to New Mexico. For a contractor working entirely from Texas, 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 Texas and New Mexico hold an agreement makes no difference to a self-employed filer — sourcing rules decide the answer instead.
How current is this?
The Texas and New Mexico rules on this page were last checked against Texas Comptroller of Public Accounts and New Mexico Taxation and Revenue Department 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.
- Texas Comptroller of Public Accounts — individual income taxaccessed 2026-08-07
- New Mexico Taxation and Revenue Department — individual income taxaccessed 2026-08-07