I found a way to make it work. I had to override the field on the Turbo Tax Michigan Schedule NR, so that pension earned by the resident spouse was entered in Column B even though the instructions say not to include it. Otherwise, the total Michigan income was too low, and the subtractions were greater than the income. I still find it weird that Michigan does not require us to prorate the $40000 tier 2 standard pension deduction when one spouse is not a full-year resident.
