1099-misc from out of state
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New Member

1099-misc from out of state

I have a 1099-misc from another state that was a signing bonus. I did not live or work in that state in 2016. Do I need to file in that state?
6 Replies
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New Member

1099-misc from out of state

Your answer is that you would not need to file taxes in that other state unless you actually (physically) worked there.  As you indicate that you did not, then you should consider this 1099-MISC as compensation earned for work performed in your home state of residence . . . regardless of the return mailing address on the check.

In other words, an employer's corporate address or headquarters that is different from the state(s) in which you live and work, has no actual meaning or effect on how you file your personal income tax return.  Thus, you don't need to input an answer in TurboTax that you made money in any another state, simply because of where your employer is based.  That's not what it means to have or earn income in more than one state (although we can certainly understand and appreciate the confusion if you haven't faced this issue before).

Let's work through another example for clarity.  Say that Jane lives and work in Colorado, but her employer is headquartered in South Carolina.  Furthermore they have a payroll office in Maryland that issues her a weekly paycheck and mails her a W-2 (or 1099-MISC) at the the end of the year.  In this situation, she only has to file a tax return and pay taxes in Colorado.  She can and does ignore South Carolina and Maryland for tax reporting purposes.  Hopefully, that logic and this explanation will help to clarify things.

In conclusion, as you can see, it makes all the difference for personal income tax reporting where you are working and living; but it does not matter where your employer is located.

Thank you for asking this important question.
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Level 2

1099-misc from out of state

This is a common misconception and can depend on many factors.  Income sourced from other states may be subject to filing requirements.  You should check non-resident filing requirements for that state.  Although true to another comment here, a company may have a headquarters in a different state than you are paid in, but if it is a W2 employer who withholds taxes, they have set up arrangements in the state you work in to withhold and remit taxes (that's why you typically only have to be concerned about filing in your own state where you're paid).  If you are not a W2 employee (such as an independent contractor, own your own business, etc.), being paid, in general, or as a 1099-misc from someone (or an entity) in another state means you have state-source income from there and could be subject to other filing requirements.  For example, I'm a non-resident of Oregon.  If someone from Oregon paid me $2,000 and sent me a 1099-MISC, I would not have to file, based on Oregon filing rules for nonresidents.  If I earned more than $2,270 from there, then I would be subject to nonresident filing requirements (https://www.oregon.gov/DOR/programs/individuals/Pages/file-requirements.aspx).

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Level 2

1099-misc from out of state

@GeoffreyG First, you can't just generally lump W2 and 1099-MISC together.  Your statement "you would not need to file taxes in that other state unless you actually (physically) worked there." is incorrect and an overgeneralization.  If the company doesn't have an established business presence in the state where you're working, you may be subject to taxes from the income-source state.  This would mainly be a concern in the case of being issued a 1099-MISC from out-of-state and moreso for sole-proprietors (independent contractors, business owners, etc).  A W2 employer in your state that you work for would have established a physical business presence there, setup withholdings, etc. in that state., and that's why you typically file your personal tax returns in that state.  You have income sourced from that state even though the parent company resides elsewhere.  They established nexus in that state.  It would take a competent tax professional to appropriately evaluate the situation to determine the best course of action.

 

Payroll office location would never come into play as that doesn't concern source-income.

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Level 2

1099-misc from out of state

@GeoffreyG  That's not correct.  Source-income and state filing requirements for nonresidents is generally what should be followed.

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Expert Alumni

1099-misc from out of state

I got some clarity from one of our Tax Experts, based on what was presented in the initial question, the taxpayer received both a W-2 as well as a 1099-MISC for a bonus payment. By rights this bonus payment was wage compensation and should have had FICA taxes withheld, with the company matching the withholding. Where Geoffrey's answer could have been clearer (though mostly correct) is that the 1099-MISC should have been claimed through Form 8919, and as such would be treated as wages. If those wages were not earned physically working in the state where the company is located, the Original Poster would not be taxed in that state if he is not a resident of that state.

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Level 2

1099-misc from out of state

In this situation with the combined W2/1099-MISC situation I'd agree.  But the general statement of 'you file where you work regardless of the issuing location' is incorrect.  If you provide services while living in one state to clients of another state, you may have filing obligations from that state.  You would have to look up nonresident filing requirements from the state where you received state-source income.  Another such example, aside from my previous Oregon comment,: https://www.coblentzlaw.com/california-office-of-tax-app[product key removed]dential-authority-to-bi...

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