Taxes paid in non resident state

[tjlttye]

MY residents is Ohio, I worked in Michigan, employer withheld taxes for Michigan.  After completing MIchigan State forms I am only due a small amount of what was paid.  Why does Michigan not refund full amount of Taxes paid to state?

[AmyC]

Michigan and Ohio have state reciprocity.  This means that your employer should only be withholding state taxes within your resident state. 

Which states have reciprocal agreements?

Your employer should have reported your state wages as being from Ohio and should only have state withholdings for Ohio.

If your employer is still withholding taxes in Michigan, complete and submit the form in the link below to your employer as soon as possible to ensure they only withhold state income taxes for Ohio going forward.

Michigan state reciprocity withholding form

Since your employer withheld taxes from Michigan, you will need to prepare a nonresident state income tax return for Michigan, and a resident state income tax return for Ohio.  Be sure to prepare the nonresident Michigan return first.

When answering the questions for Michigan, be sure to indicate that none of the wages are from Michigan sources.  They should all be allocated to Ohio.

Please see the excerpt below from Michigan for more details as well as these links to the Michigan Schedule NR (nonresident schedule) and Michigan filing instructions for additional information.

[Edited 4/17/2024|11:42AM PST]

@tjlttye