Solved: out of state 1099-NEC
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MMAZ1971
Level 1

out of state 1099-NEC

I live in Arizona but receive payment and a 1099-NEC from a California company.  Do I pay state taxes in California and Arizona?

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Accepted Solutions
MarilynG1
Expert Alumni

out of state 1099-NEC

No, if you lived in Arizona all year, and are Self-Employed, all your income is considered to be earned in Arizona and reported on your Arizona Resident State Return. 

 

You don't have to file a California return because your employer is located there.

 

If California Taxes with withheld on your income, however, you can file a  Non-Resident State Return to get them refunded to you. 

 

 

 

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4 Replies
MarilynG1
Expert Alumni

out of state 1099-NEC

No, if you lived in Arizona all year, and are Self-Employed, all your income is considered to be earned in Arizona and reported on your Arizona Resident State Return. 

 

You don't have to file a California return because your employer is located there.

 

If California Taxes with withheld on your income, however, you can file a  Non-Resident State Return to get them refunded to you. 

 

 

 

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TomD8
Level 15

out of state 1099-NEC

 @MarilynG1 's answer may not necessarily be the case.  Due to a 2019 court decision (the Bindley decision), CA may now tax non-resident sole proprietors who provide services to CA-based clients, even if the sole proprietor never set foot in California.

 

https://www.coblentzlaw.com/california-office-of-tax-appeals-gives-precedential-authority-to-bindley...

 https://www.calcpa.org/news/2019/12/19/tax-net-widens

https://www.halversontax.com/out-of-state-taxes-california/

**Answers are correct to the best of my ability but do not constitute tax or legal advice.**

C-Note
Level 1

out of state 1099-NEC

Please help me.

I'm a California resident. In addition to my W-2 job, I did contract work for a firm in New York. They sent me a 1099-NEC for $6k, no tax withheld.

1) Do I need to file a NY return in addition to my CA return? 

2) If not, what do I need to do.

Thank you

KrisD15
Expert Alumni

out of state 1099-NEC

No, since it was only 6,000 unless you are a dependent. 

If the income was earned by a business located in NY, (even when that is not your business) you would need to file a New York non-resident return if you earned more than the NY standard deduction which for a non-dependent is 8,000.

 

New York Source

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