Michigan and Indiana are reciprocal states. If you live in Indiana and work in Michigan, your employer should be withholding Indiana tax, not Michigan. In TurboTax, do your Federal return first, then the non-resident state (Michigan), then the resident state (Indiana).
Does Michigan have Indiana reciprocity?
Five states have a reciprocal agreement with the state of Indiana. They are Kentucky, Michigan, Ohio, Pennsylvania, and Wisconsin. All salaries, wages, tips, and commissions earned in these states by an Indiana resident must be reported as if they were earned in Indiana.
Do I have to pay Detroit City tax if I work from home?
The state notes: “Wages earned as a non-resident while working from a location outside the City of Detroit are not taxable to Detroit.” The city income tax rate for residents in Detroit is 2.4%. The state notes: “If you are a Detroit resident, all of your income is subject to Detroit tax, no matter where it is earned.”
Do I have to file a Michigan tax return if I live in Indiana?
Michigan and Indiana are reciprocal states. If you are a resident of IN and have income from MI you do not need to file a MI return. As a resident of IN, you do have to file a IN tax return and report all your income (MI and IN) on that return.
Is out of state income taxable in Michigan?
Are my wages earned in another state taxable in Michigan if I am a Michigan resident? Yes. If you are a Michigan resident, all of your income is subject to Michigan tax, no matter where it is earned, except income reported on federal schedule C, C-EZ, E or F earned from out-of-state business activity.
Do you pay local taxes if you work from home?
In general, if you’re working remotely you’ll only have to file and pay income taxes in the state where you live. However, in some cases, you may be required to file tax returns in two different states. This means you’ll be double-taxed, but it doesn’t necessarily mean that you’ll pay twice as much in taxes.
