The state of Michigan has reciprocal agreements with the following states:
Illinois
Indiana
Kentucky
Minnesota
Ohio
Wisconsin
If the taxpayer is a resident of the state of Michigan and earned income from any of the states listed above, the taxpayer is only required to pay Michigan income taxes on any wages or salaries earned in that state(s).
If the taxpayer does qualify for the reciprocal agreement, the credit for taxes paid to another state cannot be claimed.
If the other state is Illinois:
- Add or Edit Illinois Nonresident Return
- Net Income
- State Where You Filed a tax Return - Indicate taxpayer was a resident of Michigan
- Illinois Income
- Wages, Salaries, tips etc
- Adjustments to State Wages - Enter wages as a negative number
The Illinois return must be printed, signed and mailed to the state. Include a note explaining the taxpayer is a resident of a reciprocal state, a copy of the Iowa return and copies of the Illinois W-2(s) showing the income.
To claim exempt from future Illinois withholdings, file form IL-W-5-NR with the taxpayers employer.
If the other state is Indiana:
- Add or Edit Indiana Nonresident Return
- County Information - Complete the questions indicting taxpayer lived in Michigan and the county where you worked.
- Miscellaneous Forms
- Indiana Reciprocal return - (IT-40RNR) and answer the questions.
Please note that the taxpayer may still be subject to county tax on the income earned while a nonresident. According to Indiana Informational Bulletin #33, 'Indiana reciprocity agreements do not affect withholding requirements concerning the Indiana County Adjusted Gross Income Tax (CAGIT), County Economic Development Income Tax (CEDIT), or County Option Income Tax (COIT).'
To claim exempt from Indiana withholdings on future returns, complete form WH-47 and file it with the taxpayers employer.
If the other state is Kentucky:
- Add or Edit Kentucky Nonresident Return
- Were you a Full-year Resident of aa Reciprocal State? - Answer Yes and Select Michigan from the list of states
- Residency Information - Complete the questions indicting the taxpayer is a resident of a reciprocal state.
To claim exempt from Kentucky withholdings in the future, file form 42A809 with the taxpayers employer.
If the other state is Minnesota:
- Add or Edit Minnesota Nonresident Return
- Nonresident Income Allocation- Select your state of residency
- Total Income
- Wages, Salaries, Tips, ect
- Adjustments State Wages - Enter Minnesota income as shown on M1 line 1 as a negative number (this number should match your federal adjusted gross income.)
To claim exempt from Minnesota withholdings in the future, file form MWR with the taxpayers employer.
If the other state is Ohio:
- Add the Ohio Non Resident Return
- Nonresidents who meet certain required criteria - Answer Yes to this question. Reciprocal states qualify.
If this question was answered No when adding the Ohio Nonresident Return:
- Edit Ohio Non Resident Return
- Select Form IT-NRS (affidavit of Non-Ohio Residency). Select Yes to complete the form. Complete the next two sections indicating taxpayer place of Domicile and place of Abode (both should be the resident state).
To claim exempt from future withholdings, complete form IT-4NR and file it with the employer.
If the other state is Wisconsin:
- Add or Edit Wisconsin Nonresident return
- Legal Residence Questionnaire - Enter Taxpayer/Spouse Status and State of Residence (if not completed when adding the state)
- Wisconsin Income
- Total Income
- Wages, Salaries, tips ect
- State Wages - Enter the amount of Wisconsin Income as a negative amount
To claim exempt from Wisconsin withholdings, complete form W-220 and file it with the employer.
Note: The taxpayer may still be liable for county or city taxes in the state where the income was earned. Check with the state for more information.
Additional Information:
Michigan State Tax Information
Michigan Resident Return Instructions