Which states should I file in..?

[uschles]

Hi everyone,

During 2024, I've been providing consulting services to various companies in a few different US states (California, New York, Washington). I got 1099 forms from all of them though one of them (based in Wyoming) insisted on paying me through W-2. I live in New Jersey and have been throughout all of 2024.

I have two questions:

First, based on my understanding, because I am *not* an employee and rather a self-employed consultant, the income is considered to be NJ-based income so I don't need to file New York, California or Washington taxes - just New Jersey. Is this correct?

Second, is this true for the Wyoming based company as well (that pays me through W-2)? They consider me an employee but I am not a full time employee and only a tiny fraction of my salary comes from there. Do I need to submit taxes in Wyoming as well?

Many thanks

[rjs · Accepted solution]

You have not clearly stated where you actually did the work, but that's what really matters. If you worked only in New Jersey for clients or employers in other states, all of your income was earned for working in New Jersey and you file only a New Jersey state tax return. It doesn't matter where the client or employer is located. It also doesn't matter where you live. What matters is where you did the work.

On the other hand, if you went to other states and did some work there, you have to pay tax to each state where you worked, on the income that you earned for working in that state. That means that you have to file a nonresident tax return in each state that you worked in. (Washington state and Wyoming are exceptions, since they have no state income tax.) This is true whether you are an independent contractor or an employee. All of your income is also taxed by the state that you live in, no matter where the income is from. But you will get a credit on your New Jersey resident tax return for tax that you pay to other states.

[uschles]

Thank you for the super helpful response!

I always work out of my New Jersey home for all the work that I provide.

That said, I once went to a 2 day trip to Wyoming for a conference related to that work. It wasn't in the company's home office - just a conference. Would this mean I need to file Wyoming state taxes? (in principle - I get that there is no Wyoming state taxes)

Many thanks!

[rjs]

"In principle," if you worked for two days in a state that did have income tax you would have to check the filing requirements for that state. Each state has different rules for who is required to file a state tax return. The amount that you earn in two days might not be enough to be required to file. But in some states having any income at all from that state might require you to file. It wouldn't matter where in the state you worked. Whether it was in the company's office, a conference center, your hotel, or Starbucks, you worked somewhere in that state.

That's "in principle." In reality, most people would ignore a two-day business trip to another state, even if, according to the letter of the law, it required filing a tax return in that state. That's assuming that the two-day trip was your only presence in that state for the year. But if, for example, you spent two weeks working in another state, or you made a lot of two-day trips, that would be harder to ignore.

[uschles]

Got it - thank you very much! This is super helpful.