My employer is based in Michigan with an income tax, while I️ live in no income tax Tennessee. Am I️ entitled to the state income taxes I️ have been paying?

benminer · ‎December 8, 2020

I've been with the company for about 9 months now. I started as a contractor and then became salary. The entire duration of employment I️ have been a permanent resident of Tennessee - without an income tax. However, the payroll system has been deducting MI income tax from my paychecks. Is it right for me to get these paid taxes reimbursed to me? Everything I️ have read seems to point to that an employee only pays income tax of their resident state.

Michigan's Telecommuter policy seems to say that I️ shouldn't be, since I️ am not a resident.

https://www.michigan.gov/taxes/0,4676,7-238-73294-522100--,00.html

Thanks!

Hal_Al · ‎December 9, 2020

Some states tax telecommuters. Michigan is not currently one of them. You will need to file a nonresident MI return to get a refund. You may have to attach an explanation and use a work around in TurboTax.

Ask your employer to stop withholding, so that you don't have to file every year. Don't be surprised if they say no. They're probably not sure what the rules are, so they're covering them selves.

If you occasionally travel to MI, the wages for those days are taxable in MI. See See http://money.cnn.com/2013/06/28/pf/taxes/business-traveler-tax-threat/ If you live in a state without an income tax (e.g. TN), it’s more likely you should file in the work states. You can't use the "it all comes out even" rationale for not filing.

That said, it's not clear what MI position is on the self employment (contractor) portion of your income. That too is usually considered TN income unless you physically worked in MI.

Some MI cities also have an income tax. If city tax is also being withheld, you have to file a separate city return. Only Detroit city income tax is part of the State return. All other cities require a return. in

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rjs · ‎December 8, 2020

The information at the link that you posted appears to apply only to city tax, not to state tax.

Hal_Al · ‎December 9, 2020

Some states tax telecommuters. Michigan is not currently one of them. You will need to file a nonresident MI return to get a refund. You may have to attach an explanation and use a work around in TurboTax.

Ask your employer to stop withholding, so that you don't have to file every year. Don't be surprised if they say no. They're probably not sure what the rules are, so they're covering them selves.

If you occasionally travel to MI, the wages for those days are taxable in MI. See See http://money.cnn.com/2013/06/28/pf/taxes/business-traveler-tax-threat/ If you live in a state without an income tax (e.g. TN), it’s more likely you should file in the work states. You can't use the "it all comes out even" rationale for not filing.

That said, it's not clear what MI position is on the self employment (contractor) portion of your income. That too is usually considered TN income unless you physically worked in MI.

Some MI cities also have an income tax. If city tax is also being withheld, you have to file a separate city return. Only Detroit city income tax is part of the State return. All other cities require a return. in

benminer · ‎December 9, 2020

Realized that shortly after posting!

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My employer is based in Michigan with an income tax, while I️ live in no income tax Tennessee. Am I️ entitled to the state income taxes I️ have been paying?