What are the state residency rules for 1099 filing?

Even if state-specific information wasn’t included on the form, you may still be required to file with the recipient’s state based on residency status or where the income was earned.

Why this matters

Many states have their own 1099 reporting requirements that go beyond federal rules. These requirements vary but generally fall into two categories:

• Residency-based reporting: Some states require you to file a 1099 if the recipient is a resident of the state, even if no state tax was withheld and regardless of how much was paid.
   
• Source-of-income reporting: Some states require reporting even for non-residents, as long as the income was earned from within that state (e.g., work performed or services rendered in-state).

What you should do

• Check the 1099 filing rules for the recipient’s state

• If filing is required, make sure to:

  • Complete all relevant state fields on the form

  • Enable state filing for those recipients in TaxBandits during the review or filing process

 

State Filing Guidance for 1099 Forms

State residency rules for filing a 1099 form depend on both the income earner’s place of residence and the location where the work or services were performed. These rules ensure proper reporting of income to the relevant state tax authorities, regardless of whether taxes were withheld. 

General Filing Criteria Across States

• Most states require filing if payments are made to residents or nonresidents when the income is sourced to the state.

• Filing is often mandatory regardless of state tax withholding for payments that meet or exceed a specific monetary threshold.

• States with Combined Federal/State Filing (CF/SF) may receive forms directly from the IRS unless specific conditions apply.

---

State-Specific Filing Requirements

California (CA)

Filing is required:

• For California residents or part-year residents of the tax year.

• For 1099 transactions conducted in California.

Maine (ME)

Filing is required:

• If a 1099 is issued to Maine residents.

• If payments are sourced to Maine.

Delaware (DE)

Filing is required:

• For Delaware residents, regardless of where services are performed.

• For nonresidents for services performed within Delaware.

Connecticut (CT)

Filing is required:

• For residents and nonresidents for services performed wholly or partly in Connecticut.

• Even if no Connecticut tax is withheld for:

  • 1099-MISC/NEC forms issued to Connecticut residents.

  • Nonresidents when the source is Connecticut.

• -R forms must be filed for Connecticut residents, and for nonresidents, only if Connecticut tax is withheld.

• Payees located in Connecticut must also file.

Oregon (OR)

Filing is required:

• Even if no state tax is withheld.

• For one or more information returns sent to Oregon recipients, winners, or payers.

• If the payer or recipient has an Oregon address.

Rhode Island (RI)

Filing is required:

• For nonresident compensation for services performed in Rhode Island.

• If Rhode Island tax is withheld.

• If the payment, wholly or partially, is derived from obligations of other states and/or their political subdivisions.

Wisconsin (WI)

Filing is required:

• For payments to Wisconsin residents, regardless of where services were performed.

• For nonresidents for services performed in Wisconsin.

North Dakota (ND)

Filing is required:

• For residents.

• For nonresidents if the income is sourced in North Dakota.

Pennsylvania (PA)

Filing is required:

• For taxable Pennsylvania-source income to residents and nonresidents.

• For non-employee compensation for Pennsylvania-based work, oil/gas lease payments, or real estate income.

• -R forms must be submitted for personal income tax purposes.

Oklahoma (OK)

Filing is required:

• For payments of $750 or more to Oklahoma residents.

• If any Oklahoma tax is withheld.

• If the source of the transaction is from Oklahoma.

Hawaii (HI)

Filing is required:

• For any business or trade making payments in Hawaii.

• Copies of federal Form 1099 must report income of $600 or more.

• Payments subject to withholding for a DC resident must be filed.

Vermont (VT)

Filing is required:

• If the payment is subject to Vermont withholding.

• If the payment is made to nonresidents for services performed in Vermont.

Missouri (MO)

Filing is required:

• If the state income of $1,200 or more is sourced from Missouri, except:

  • Wages with tax withholding.

  • Income reported for partnerships or S corporations.

New Jersey (NJ)

Filing is required:

• If payments total $1,000 or more in a calendar year.

• If New Jersey Income Tax was withheld.

Kansas (KS)

Filing is required for all taxable non-wage payments made during the tax year.

Michigan (MI)

Filing is required for payments issued to Michigan residents, regardless of payer domicile or work/service location.

Mississippi (MS)

Filing is required for payments of $600 or more to Mississippi residents in any calendar year.

Montana (MT)

Filing is required for distributions made to Montana residents or businesses.

Alabama (AL)

Filing is required:

• If total reportable payments exceed $1,500.

• If no state tax withholding and the federal threshold is exceeded.

• Alabama CF/SF program forwards forms for payments below the state threshold.???????

Massachusetts (MA)

Filing is required if state income is reported.