The rules
| Income tax | None on wages or nonemployee compensation (the Hall tax on interest and dividends was repealed for 2021 and later). |
| Exception: 1099-K | Tennessee requires payment settlement entities to file 1099-K information with the Department of Revenue for Tennessee payees. Confirm the current due date on the department's site. |
Questions people ask about Tennessee
Do I have to file 1099s with Tennessee?
No. Tennessee has no individual income tax, so there is no state copy of Form 1099-NEC, MISC, INT, DIV or R for payees there. The exception is Form 1099-K: payment settlement entities must file copies with the state for Tennessee payees.
Does Tennessee withhold state tax on payments to contractors?
No. With no individual income tax there is no state withholding on nonemployee compensation, and no state backup withholding. Federal backup withholding at 24% still applies to a payee with a missing or incorrect TIN.
Do the federal rules still apply to Tennessee payees?
Yes, in full: W-9 collection, IRS TIN matching, CP2100 B-Notices, backup withholding and the IRC 6721 penalties are federal and do not depend on the payee’s state.
Verified September 24, 2026 against https://www.tn.gov/revenue. Rules change annually and most states had not yet posted 2026 specifications at the time of review; confirm before filing.
What does not change by state
TIN matching, B-Notices, backup withholding and the IRC 6721 penalty are federal. A payee in Tennessee who gives you a name/TIN pair that does not match IRS records produces the same CP2100 line as one anywhere else, and the same 15- and 30-business-day clocks. State filing is a separate obligation layered on top.