Self-employment tax in Tennessee
Good news for Tennessee freelancers: Tennessee has no state income tax on earned income. That means as a 1099 contractor or sole proprietor you owe only federal self-employment tax and federal income tax on your earnings - with no Tennessee individual return or estimated-tax schedule to file.
What a Tennessee freelancer owes
- No Tennessee state income tax on your freelance or 1099 income.
- You still owe federal self-employment tax of 15.3% (12.4% Social Security + 2.9% Medicare).
- Plus federal income tax on your net profit (after the deductible half of SE tax).
Estimate your Tennessee taxes
Free 1099 self-employment tax calculator. No sign-up.
Tennessee has no state income tax, so this federal estimate is your full bill.
States with no income tax are set to 0%. Estimate only — adjust for local taxes.
Estimates use 2026 US federal figures (IRS Rev. Proc. 2025-32): self-employment tax of 15.3% (12.4% Social Security up to the $184,500 wage base + 2.9% Medicare) plus federal income tax on your net profit after the standard deduction. State and local taxes are only included if you set a state rate above. Simplified estimate for planning only — not tax advice.
Guide: Self-employment tax in Tennessee — no state income tax
Tennessee is the simplest state in this guide for one reason: Tennessee has no state income tax on earned income — current for 2026, and true for all years from 2021. That means no Tennessee tax on your freelance or 1099 income, no withholding requirements for it, and no standard deduction or exemption to compute, because those concepts are not applicable. The Hall tax, which applied only to interest and dividends, was repealed for tax periods beginning on or after January 1, 2021.
That leaves only the federal bill — but it is still a big one. Self-employment tax is 15.3% (12.4% Social Security + 2.9% Medicare) on 92.35% of your net profit, and it applies once your net earnings reach $400, plus federal income tax on your net profit after the deductible half of SE tax. The Social Security wage base is $184,500 for 2026; Medicare is uncapped. An additional Medicare tax of 0.9% applies above $200,000 for single and head-of-household filers ($250,000 joint, $125,000 married filing separately).
Two Tennessee business taxes can still touch freelancers, and neither is an income tax. First, the Tennessee Business Tax (a gross-receipts and privilege tax): businesses in a Tennessee county or incorporated municipality with $100,000 or more in gross receipts must register and remit it, in state and city components. Licensing tiers (Business Tax Manual, June 2026): the filing threshold was raised from $10,000 to $100,000 for tax years ending on or after December 31, 2023; a standard business licence applies at $100,000 or more in gross sales, a minimal-activity licence at over $3,000 but under $100,000, and no licence is needed at $3,000 or less. Second, the Franchise and Excise Tax applies to entities only, not sole proprietors: franchise tax of 0.25% of net worth (minimum $100) plus excise tax of 6.5% of net earnings, on Form FAE170. There is no local income tax; the city business tax is the local levy.
Worked example. Take a freelancer with $60,000 of profit. Tennessee income tax is $0. Federal SE tax is $60,000 x 92.35% = $55,410, x 15.3% = $8,477.73. At $60,000 of gross receipts, the business sits in the minimal-activity licence tier (over $3,000 but under $100,000) — no business-tax amount is quoted here, because the data sheet gives thresholds, not a rate.
There is no Tennessee individual estimated-tax schedule and no individual income tax return to file for earned income — but your federal quarterly estimates still apply, on Form 1040-ES, due mid-April, mid-June, mid-September, and mid-January. Keep every receipt and invoice in MoneyFeed via WhatsApp, so your federal net profit is ready when each estimate comes due.
FAQ
Yes. Tennessee has no state income tax on earned income and therefore has no withholding requirements for it. That position is current for 2026 and applies to all years from 2021. The Hall tax, which applied only to interest and dividends, was repealed for tax periods beginning on or after January 1, 2021.
No. There is no Tennessee individual estimated-tax schedule and no individual income tax return to file for earned income. Your federal estimates on Form 1040-ES still apply.
It is a gross-receipts and privilege tax. Businesses in a Tennessee county or incorporated municipality with $100,000 or more in gross receipts must register and remit it (state plus city components). Licensing tiers: a standard business licence at $100,000 or more in gross sales, a minimal-activity licence at over $3,000 but under $100,000, and no licence needed at $3,000 or less. The filing threshold was raised from $10,000 to $100,000 for tax years ending on or after December 31, 2023.
No. It applies to entities only: franchise tax of 0.25% of net worth (minimum $100) plus excise tax of 6.5% of net earnings, on Form FAE170. Sole proprietors are not subject to it.
The calculator's federal estimate is your full bill: Tennessee adds no state income tax, so there is nothing to enter in the State Tax field. Just remember the business-tax thresholds above if your gross receipts approach $100,000.
Tennessee freelancer tax — FAQ
Do freelancers pay state income tax in Tennessee?
No. Tennessee has no state income tax on earned income and therefore has no withholding requirements for it. The Hall tax, which applied only to interest and dividends, was repealed for tax periods beginning on or after January 1, 2021.
Do I have to file a Tennessee individual return or pay estimates?
No. There is no Tennessee individual estimated-tax schedule and no individual income tax return to file for earned income.
Does Tennessee have any business tax for freelancers?
Possibly, if your gross receipts are high enough. Businesses in a Tennessee county or incorporated municipality with $100,000 or more in gross receipts must register and remit Tennessee Business Tax (state plus city components). There is a standard business licence at $100,000 or more in gross sales, a minimal-activity licence for over $3,000 but under $100,000, and no licence needed at $3,000 or less. Sole proprietors are not subject to the Franchise and Excise Tax, which applies to entities only.
Figures are 2026 headline guidance for freelancers and the self-employed, not tax advice. Check current IRS and state rules or a CPA for your situation.