Box 16 greater than Box 1, MI and OH

[aloeiciousal]

I have worked in Michigan since mid-June, and lived in Ohio from January till September, when I moved to Michigan. On my w2 for this employer, my state incomes combined exceed Box 1. My employer stated this was because Michigan taxes the difference between Ohio and Michigan tax, as MI income tax is higher. Thus, the MI income equals Box 1, and Ohio is the amount I earned between June and September. I do not contribute to an HSA or any deductible expenses. How do I reconcile this?

[Hal_Al]

The  reciprocal agreement between OH & MI does not generally apply to part year residents. 

 Despite the apparent discrepancy, enter the W-2 exactly as received.  You will be filing two part year resident returns (MI & OH). TurboTax will use the box 16  amounts to allocate your wage income to the two states.  

Ohio does a convoluted tax calculation for non-residents/part year residents. It calculates tax on total income, then it calculates a non resident/part year resident credit, which it subtracts from the tax it calculated on the total income. The credit is calculated as your non-Ohio income divided by Total adjusted Income multiplied by the total tax. TurboTax (TT)   does this by allocating your income as either Ohio or non-Ohio. W-2 income will be allocated by the state name abbreviation shown in box 15 of your W-2.

I'm not familiar wit MI software. The allocation may be done differently.  Both MI & OH will tax the Jun-Sept income. OH because you lived there, MI because you worked there.  But  (I think) MI will give you a credit (or maybe only partial credit ) for the tax paid to OH on the same income.

[TomD8]

<<"The  reciprocal agreement between OH & MI does not apply to part year residents. ">>

This doesn't appear to be true for part-year residents of OH.  The instructions for Schedule A, Adjustments, Line 12, of the Ohio tax return state:

"Enter compensation amounts earned in Ohio during the portion of the year that you were a resident of Indiana, Kentucky, West Virginia, Michigan, and/or Pennsylvania."

See page 15, "Reciprocity Wages":  

https://tax.ohio.gov/static/forms/ohio_individual/individual/2020/pit-it1040-booklet.pdf

I cannot find any similar phrasing in the MI tax instructions, although page 6 states: 
"Michigan residents pay only Michigan income tax on their salaries and wages earned in any of these (reciprocal - includes OH) states."

[Hal_Al]

@TomD8  That doesn’t cover the poster’s situation, who worked in MI while an OH resident., rather than the other way around.

But your "flag" did cause me to review my reply, which was only a generic state answer.  I have now revised it  to be Ohio specific. I'm not familiar with how  MI handles this situation, but assume there's some place to claim a credit  for the duplicate taxed income. I believe MI (not OH) is the place to claim that.

In the OH software, it's at the screen titled “Take a look at Ohio Credits and Taxes” / “Personal, home and family credits” / “Taxes on income in other states”. There you enter the income double taxed.  I assume MI has something similar