state tax

[dp728]

live in Ohio but work in Michigan; employer took out MI taxes; how do I get refund from MI and file OH; don't care that they are reciprocal.  Ohio is more favorable for someone that made $15,000.   It appears tax liability for Mi is the same  at 4.25% whether you make $10,000 or $100,000.  In Ohio there are many tiers, and based on my income my tax liability would be zero and I would get money back if Ohio taxes taken out versus Michigan, in which case I will get nothing back.

[Anonymous]

file MI as non-resident

Submit exemption Form MI-W4 to your employer if you work in Michigan and live Ohio

file Ohio as a resident.

one other option is to see if employer will file amended payroll tax returns - but I doubt they'll do it.  they may be able to get back MI taxes but might have penalties when filing for Oh.   then you'll have to wait for corrected w-2. 

[Hal_Al]

"don't care that they are reciprocal"

It ain't optional, which state you pay taxes to.  Thanks to the reciprocal agreement, it IS Ohio that you are required to pay, not MI.

Ohio has a reciprocal agreement, on wages,  with all neighboring states. No state taxes are withheld or due and you do not normally need to file a return for the other state (MI, PA, KY, WV, IN). But OH will tax you on your other state income.

If other state taxes are mistakenly withheld, you then have to file a return, for the other state, to get a refund. OH will not give you a credit. You should ask your employer to stop withholding so you don't have to file a MI return every year.

However the reciprocity agreement does not apply to local city taxes.  You can not get those refunded, but if you live in an Ohio city with a tax, they may give you a credit or partial credit. Many do.  You need to check with your city.

If you are subject to Ohio School District Income Tax (SDIT), you can not get a credit, for MI city taxes withheld, on an SDIT return.

[dp728]

I have paper forma MI 1040 and NR-- but there doesn't seem to be anywhere on 1040 that non-resident information transfers to MI 1040 to reduce/eliminate tax liability.

[Hal_Al · Accepted solution]

They don't make it easy (in contrast, IN & KY have simple one page forms for reciprocal state residents).

You were a non-resident of Michigan who lived in a reciprocal state*. 
You had Michigan tax withheld from your wages. You must file a Michigan Individual Income Tax return to claim a refund of Michigan tax withheld.
Required forms include (not limited to): MI-1040, Schedule 1, Schedule NR, and Schedule W.

Schedule 1 has the deduction, hidden away on line 13.  

https://www.michigan.gov/documents/taxes/Schedule_1_711862_7.pdf

*reciprocal states:
Illinois, Indiana,
Kentucky, Minnesota,
Ohio, and Wisconsin

[dp728]

Thank you so much.  I see it now!