Paying quarterly estimated in two states for remote 1099?

[sajero2]

I am a new 1099 freelancer and have a contract with an employer who is in NY while I'm in MN. I know I'll need a file a NY state income tax come April, but how does it work paying quarterly taxes? Do I have to pay to both MN and NY quarterly, knowing MN will likely credit me come April? Or can I just pay my quarterly estimated in MN and file once in NY in April? Thank you!

[Gabriella_EA]

Hello sajero2!

Thanks for joining us for the event today, and for this great question!

It sounds like you're a full-year resident of MN for 2023, but with some NY-source income as well.

Quarterly estimated tax payments are optional, but they can help you avoid a significant tax liability and penalties when it comes time to file.

If you only wish to make quarterly estimated tax payments to one state, I'd recommend making them to NY, as you're correct that MN should give you the credit for taxes paid to NY. Keep in mind that this credit is often not exactly dollar-for-dollar on your resident state return (MN).

The next (and final for 2023) quarterly estimated tax payment is due 1/15/24.