You will owe taxes in your resident state if you work in another state and only withhold taxes in your nonresident state. If you live in Indiana and work in Michigan, your employer should be withholding Indiana tax, not Michigan tax.
Michigan and Indiana have a reciprocal agreement. Generally, this means that all salaries, wages, tips, and commissions earned in Michigan by an Indiana resident must be reported as if they were earned in Indiana. However, if taxes have been withheld or paid to Michigan, then a nonresident return would have to be filed for a refund of state tax for Michigan and a resident return would have to be filed to pay tax to your resident state of Indiana. Because they have a reciprocal agreement, you will get a refund of taxes withheld from Michigan and be taxed on it in Indiana.
Please submit MI-W4 to your employer so that Indiana tax is withheld from your pay, rather than Michigan tax.
For more information, please see What is a state reciprocal agreement?
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