We have both W-2 employees and 1099 contractors, and for our W-2 employees, their gross pay is reported to both Pennsylvania and Maryland, but for the federal pay, the housing allowance is deducted. So I would assume the same differences would be reported for 1099 workers, if they had a Housing Allowance. We have a 1099 contractor who would like to have a Housing Allowance, but I didn't know if it was possible.
