Own rental property in MI with zero income. Do I need to file non-resident return for MI?

[Jay147]

I am a CA resident, and I bought a rental property in MI late 2023. The rental property didn't generate any income until Jan 2024. Do I need to file non-resident return for MI?

[DawnC · Accepted solution]

No.  Generally, you’ll need to file a nonresident state return if you made money from sources in a state you don’t live in.   Some examples are:

• Wages or income you earned while working in that state
• Out-of-state rental income, gambling winnings, or profits from property sales
• S corporation or partnership income
• Beneficiary income from a trust or estate
• For active duty military: non-military income earned outside your state of legal residence
• If your employer withheld taxes for the wrong state

[Jay147]

The property didn't generate any income in 2023. But it did have some expenses, such as property tax, HOA, some repair work. I assuming if I file non-resident return for MI, the net loss from this property will be carryover to 2024. But I am not sure if I don't file, the net loss will be carryover?

[DianeW777]

Yes, you should file a Michigan tax return for 2023. The filing requirements for Michigan (MI) are as follows:

• You must file a Michigan return if you file a federal return or your income exceeds your Michigan exemption allowance. A return must be filed even if you do not owe Michigan tax.

• MI goes on to say: File a return if you owe tax, are due a refund, or your AGI exceeds your exemption allowance. You should also file a Michigan return if you file a federal return, even if you do not owe Michigan tax. This will eliminate unnecessary correspondence from Treasury. 
  • Multiply the number of exemptions by your exemption allowance of $5,400
    • MI Filing Instructions (page 3)
• @Jay147