Please see this Turbo Tax FAQ:
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.
If your employer withheld any MI tax from your income, you would
have to file a MI non-resident return to get a refund of those taxes.
Also, file WH-47 with your employer to stop any MI withholding.https://ttlc.intuit.com/replies/3302052
For the most part, state reciprocal agreements are an East Coast/Midwest phenomena.
If you work in the District of Columbia, Illinois, Indiana,
Iowa, Kentucky, Maryland, Michigan, Minnesota, Montana, New Jersey,
North Dakota, Ohio, Pennsylvania, Virginia, West Virginia, or Wisconsin,
and you're a resident in one of their reciprocal states, fill out and
submit the corresponding exemption form to your employer to be
considered for exemption. With this exemption, no withholding is taken
out of your paycheck for the state you work in.
Important! Also ask your employer to withhold taxes for your resident state
instead of your working state. If they can't or won't do it, you'll
have to make quarterly estimated payments to your resident state or risk
underpayment penalties come tax time.
