Live in Florida remote work to Michigan company

[LisaMK]

Hi, I have lived in Florida and worked for a company in Michigan for three years.  This year my company gave me a paper to fill out to not have Michigan state taxes taken out.  I have paid MI state taxes for the last three years and have been only getting $200 to $300 dollars back when I file each year.  Should I be getting the full amount paid in back each year?  If so, should I do an amended tax filing for the 2021,2022,2023 tax years?  It would be a significant amount of money, so I think worth it if I can.  

Thanks for any help, I have been reading post all morning to try and figure this out.

Lisa

[KrisD15 · Accepted solution]

Yes, you should be getting the Michigan tax withheld refunded since you do not live nor work in Michigan. 

Why do you only get a partial amount back when you file a Michigan return? Are you allocating zero income to the state of Michigan? 

Michigan taxes nonresidents on income only if they are physically present in the state. 

Yes, you should amend the state returns if you are due refunds. Some states DID tax remote workers in the past but I do not think Michigan ever did. You can ask your payroll department and they would know if the tax laws changed for Michigan. 

[LisaMK]

To be honest Kris,

I didn't know I didn't have to pay Michigan State tax, or didn't think about it when I moved.  And the company didn't say anything... until this year.  

Thanks so much for your advice.

Lisa

[KrisD15]

Yes, but for the past three years, while you were living in Florida, did you file a Michigan return? If yes, did you only get PART of the Michigan state tax refunded? 

You say-

 “ I have paid MI state taxes for the last three years and have been only getting $200 to $300 dollars back when I file each year”

so I wonder if you mean you filed for Michigan and only received 200-300 back from Michigan or from the federal return? 

You should have gotten all the tax withheld if you filed a Michigan return while a Florida Resident. 

NOTE:

If you ITEMIZED on your Federal return, and claimed state tax paid on Schedule A, you might need to claim any tax refund you get from Michigan as federal income for the year you get the state refund. 

If you used the Standard Deduction (and most people do take the Standard Deduction) the state refund won't need to be reported. 

[LisaMK]

Yes while living in Florida and working remotely for Michigan U. I had been filing my taxes as I did when I lived there.  Not understanding I shouldn't be paying the MI taxes.... and yes, I would only get a partial ($2-3 hundred dollar) return when they took out almost $3,000 a year.   

This is only state taxes not federal.  And yes, I took standard deductions.  

Thank you for your patients.  Taxes are very confusing to me.  I appreciate the time and effort you took to make sure you were giving me good advice.  

Lisa

[DMarkM1]

Then yes, amend your prior year MI state tax returns and in the "Income" section each year as a non-resident you should allocate zero income to MI.  This will trigger a refund of all MI taxes withheld less the refunds you already received.  

Since you itemized each year the state refunds will not be taxable at the federal level and you do not need to amend your federal returns.  

Finally be sure you complete the paperwork with your employer to stop MI withholding going forward.  If there has been MI withholding in 2024, then you will need to file a non-resident return for MI again next year to get that refunded as well.

Here is a helpful link on amending prior year state returns in TurboTax.