I'm filling out a Michigan state return for my son who resides in Illinois but attends school (and worked at school) in East Lansing. This is a reciprocal state, but there was state and local tax withheld on his wages that he earned from the school. How should I answer the questions asking if any of this income was earned in East Lansing (and also the state of Michigan)? Ultimately he should owe no taxes to Michigan nor East Lansing due to the reciprocity, but I'm not yet seeing that in the return so probably need to change an answer.
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In the Personal Info section, look for "Did you earn money in any other states?" Answer Yes, and select Michigan. This will add the Michigan nonresident return in TurboTax.
In the Michigan section of TurboTax, you indicate that there is no Michigan-source income. You will then get a refund of the withholding.
Thanks MaryK
So, even though he was working in East Lansing (while he lived there during the school year), the answer still will be that there is no Michigan source income (due to the reciprocity)? Just want to confirm since he truly was earning it while living in East Lansing for school.
Yes, that is correct. Michigan recognizes the residency of reciprocal states even when they work in Michigan. File your son's nonresident Michigan return for a full refund. He will pay tax in his resident state if he meets the filing requirement.
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