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New Member

Reciprocal state withheld in error

As I am a resident of Illinois, but a student and a student-employee at a Michigan university, my income made in Michigan would not be taxed due to the reciprocal agreement between the two state. Unfortunately, taxes were withheld in Michigan. I've entered my W2 into the Turbotax software, as well as bought an additional state tax form of Michigan, along side my free state tax form of Illinois, so I could get my Michigan taxes back. As I went through the guided steps, the software stated that I was estimated to receive 1/4 of the total taxes held in Michigan, but I should be receiving the entire held taxes to provided to Michigan. I haven't submitted any of my tax forms yet, so how could I fix this error before I submit my tax forms to their destinations? Thank you!

3 Replies
Level 15

Reciprocal state withheld in error

You should be completing a MI non resident return and be allocating NO income to MI  so you get a full MI refund. Then correct the withholding issue in 2020...

Returning Member

Reciprocal state withheld in error

This is for the downloadable TurboTax.  I had the same issue with withholding in error by a neighboring state. There was no question in the step by step procedure, ever asked if withholding was in error.  After searching through the state tax forms I found that there was a box to check if withholding was in error. Checked the box & all the calculations went away.  All state tax withheld was now shown as refund.  I think question should be asked when preparing state tax.

Employee Tax Expert

Reciprocal state withheld in error



Please be aware that taxable scholarships would be taxed by Michigan (and any local taxing authority) even if you are an Illinois resident. 

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