Reciprocal State Has Higher Tax Rate

[Kimber1968]

We are Indiana residents. My husband worked 3 months in MI and state income tax was withheld. Although recalculating by doing the nonresident state first, is it odd that my resident state went from owing hundreds to just a flat $0 refund?

[MarilynG1]

Since we can't see your returns in this forum, I would suggest you review your State Tax Forms, but if the Michigan tax paid covered your Indiana income, that would not be unusual. 

@Kimber1968 

[Mike9241]

under the reciprocity agreement between MI and IN you only pay income taxes in IN, your resident state, and would be entitled to a complete refund of MI taxes withheld. 

[Hal_Al]

Q. Is it odd that my resident state went from owing hundreds to just a flat $0 refund?

A. Yes.

You may be  doing it wrong. In a reciprocal state situation, where tax for the wrong state was withheld, you do not claim a credit (for tax paid to another state) on your IN return. Instead, you file a non resident MI return to get a full refund of the withholding.  You file a regular IN resident return, paying tax on all your income. There will be no mention of the MI situation, on the IN return. 

See: https://ttlc.intuit.com/community/state-taxes/discussion/re-state-tax/01/1501675#M67119

[TomD8]

And on the non-resident MI return, you allocate zero income to MI.