Michigan and Indiana have reciprocal agreements.
Based on the limited facts, you would be deemed a Michigan resident. As such, wages earned in Indiana by a Michigan resident would be exempt from Indiana state tax.
So to answer your question, you would be taxed only in Michigan on those wages / bonus.
@Rick19744 Thank you for the answer, it is exactly what I understood should happen. Sadly my previous employer withheld both Indiana and Michigan state taxes and when I challenged that, they paid me the amount initially withheld for Michigan and retained the Indiana tax amount. This would require me to file Indiana tax return next tax year.
I will be reaching out to HR again to challenge their decision.
Unfortunately, I doubt they will change what has occurred.
I understand the frustration of doing this incorrectly, but sometimes it is better to leave it as is, file in Indiana to get the refund and move on.
In these cases, the only person that gets frustrated would be you, so I would just move forward.
I believe you technically need to provide them with an exemption form if you didn't want Indiana tax withheld.