Do I need to file taxes in more than one state?

[mollyg]

I work with a modeling agency that is located in Wisconsin, but I live in Illinois. Models work as independent contractors through agencies - I established a EIN to work with them but not a LLC. I thought that I would need to file taxes in both Illinois (to report income from my Illinois based agency) and Wisconsin, but on my 1099 MISC from my Wisconsin agency, Illinois is listed on line 17 as the "State/Payer's state no." I'm not sure what this means or if it impacts whether or not I need to file in Wisconsin...since I'm an independent contractor based in Illinois and am not employed by the agency, does this mean I wouldn't file in Wisconsin? I also booked jobs in multiple states through the Wisconsin agency - Iowa, Illinois, and Wisconsin. Does this impact anything? 

[KarenJ · Accepted solution]

Even though there are Reciprocity Agreements with Illinois, Wisconsin, Iowa, Kentucky, and Michigan for taxpayers that live in one state and are an employee in another state, this agreement does not cover taxpayers that are self-employed and live in one state and work in another state.

Filing a Wisconsin Income Tax Return A nonresident or part-year resident of Wisconsin must file a Wisconsin income tax return if his or her gross income from Wisconsin sources is $2,000 or more.

Filing an Iowa nonresident income tax return is required if his/her net income from Iowa sources is $1000 or more.

When you prepare a resident and nonresident state returns in TurboTax, make sure you prepare the nonresident returns first and the resident (Illinois) return last. This is so the software program can calculate the amount of credit that should be included on your Illinois return to help offset double taxation.

[Edited 02.24.18 /1:53 pm]

[mollyg]

Hi Karen. Thank you for your response. I took a look at the Reciprocity Agreement online. If I'm an independent contractor and received a 1099 MISC from the agency, would this agreement still apply to me? The agreement states: "Because reciprocity does not apply to income from self-employment, the individual must file a Wisconsin income tax return to report the self-employment income." This is the link I looked at: <a rel="nofollow" target="_blank" href="https://www.revenue.wi.gov/DOR%20Publications/pb121.pdf">https://www.revenue.wi.gov/DOR%20Publicatio...>

[KarenJ]

Hi Mollyg... thank you so much for your response and for letting me know I gave you an incomplete answer.  I will update my response.

[mollyg]

Thank you Karen!