Yes, you need to prepare a nonresident Michigan return for the income earned in Michigan. You need to prepare the nonresident Michigan return before your Alabama resident return so TurboTax can calculate the credit on your Alabama return for the tax on your Michigan nonresident return.
According to Michigan filing instructions:
Nonresident.
Use Schedule NR to figure your Michigan
taxable income. You must pay Michigan income tax on the
following types of income:
• Salary, wages, and other employee compensation for work
performed in Michigan, unless you live in a state covered
by a reciprocal agreement (see “Reciprocal States”). Alabama is not a reciprocal state.
