1099-MISC for out-of-state

[ParagonRob]

I'm self-employed and operate as a sole proprietor. I received several 1099-MISC forms from my clients this year, and even if a client is from out-of-state, Box 17 is always either blank or they enter my home state rather than where they are from.

Do I need to file this 1099-Misc income with those separate states as well (in other words, a separate state return for my home state and the state where the client is located), or just my home state where my business is based? There are times that the work is virtual and done completely from my home, but there are times when I'll cross state lines to work on location with them somewhere else. Thanks! 

[DavidD66]

For the 1099s that you do all the work from your state of residence you do not need to report it to the state from which it was received.  If you are performing the work in another state, you need to file with that state and report the income you earned there.  Different states have different rules about when you have to report income to that state, so you should check the reporting requirements for the particular states in question.  How do I contact my state Department of Revenue?

[ParagonRob]

Thanks @DavidD66 - one more for you:

So if Box 17 has a state other than my own, but I did that work from remote (at home) then I don't have to file that with the state in the box, correct? Because 17 just indicates the home state of the payer, not necessarily where the money was made? Am I understanding correctly? I still only have to file it with my home state?

Also, sorry for taking so long to reply, I never got a notification that you answered this and the whole thing slipped my mind.

[JotikaT2]

Not necessarily.

Each state has its own set of rules.  Some states require you to file a tax return if your income was generated from a source within their state.  Others do not.

Please comment with the states where you earned your income.  This will allow us to direct your accurately to ensure you file returns in each state required.

[ParagonRob]

@JotikaT2 , I live in NJ and the 1099 was from PA

[JotikaT2]

You must file a return in Pennsylvania as a nonresident. 

Pennsylvania(PA) taxes you for income generated from PA sources for anything over $33. 

PA filing requirement

You will make your entries in the My Info section of TurboTax. 

Confirm that you have entered the correct state information: 

1. Click "Edit" to the right of your name 
2. Confirm your input under #2 "Tell us the state(s) you lived in" 
3. Do the same for your spouse if you are married filing jointly. 
4. Go back to the personal information section, and verify the mailing address and "Other state income" section. You would enter Pennsylvania in this section. 

When you complete your federal return, you will continue to the state questions. 

Prepare the Nonresident Pennsylvania state tax return first.  Be sure to answer the questions carefully as you only want to report the income that is sourced to PA sources.

Once you have entered all of the Pennsylvania information, then start your New Jersey return.  This will ensure you receive any credits for taxes on income which may have been taxed in both states. 

[ParagonRob]

@JotikaT2 I forgot to add PA early on, so now my entire return is done aside from adding PA. I already did NJ and a single W2 for NY, as well as the federal. What issues might I run into when adding PA after those have already been finished?

[JotikaT2]

You may have been able to claim a credit on your state resident return for the taxes you end up paying in PA.  

Once you complete your PA return, you can always go back and amend your New Jersey return to claim a credit for the taxes paid in PA, if any.  

It will not affect your federal or New York nonresident return so you would not need to amend those.

I have attached a link with instructions for amending your state returns.  

Steps to amend a state return

[ParagonRob]

@JotikaT2 I haven't filed anything to need to file an amended return, it's all still live in TurboTax. I got as far as paying for the filing and then decided to wait to actually submit it so I could look it over and realized that I forgot to add PA. So if I add it now, do what needs to be done, will the error check process look for credits for NJ, or do I have to just run through the prompts for NJ again to have the program do that?

[JotikaT2]

Prepare the PA nonresident return.  

Then go over New Jersey again.  It should pull the PA credit into the return.  If it does not, add it in the section titled Credit for taxes paid in another state to ensure you get credit for any taxes paid in PA on your New Jersey return.

[ParagonRob]

@JotikaT2 Perfect, thank you!

[JotikaT2]

You are welcome!

[rbatra311]

@JotikaT2 

I am in a similar yet different situation. I am a FT resident of CT receiving a W-2; and did some additional work physically in CT, but the company is based in MA. They gave me a 1099-misc with information only on box 6.

My questions are (sorry):

1. when I fill the info on TT premier- it raises my federal and CT state taxes due. So that means I am gonna pay federal and CT state tax- wont MA also ask for a piece here?

2. Do I file anything with MA? And is that done through TT (downloading MA state) or separately

Thanks so much in advance

Roger

[PatriciaV]

Please clarify if the work was performed in Massachusetts and if the employer sent you a W-2 for that income. Form 1099-MISC Box 6 is for medical payments to a healthcare provider.

[rbatra311]

Hi @Pat ,

Thank you for your reply. The work was performed physically in CT, but the employer is based in MA. I didnt receive a W-2, but 1099-MISC. 

Also to note, this was not a work from home, but in a hospital in CT (my resident state)

Since my work is that of a physician, probably why they put the payment in the box-6, does that change :

- me filing a MA tax return (do I need to)?

- do I then have to pay taxes to MA instead of CT or both?