I moved to PA, but work from home for MI company. Enter the portion of these wages that is reportable to MI - Should I put 170/366*Wages for MI and 196/366*Wages for PA?

[Z1]

We moved from MI to PA because of my wife's job, but I still work for the same employer in MI from home. All my state withholding is MI. I was resident of MI for 170 days and resident of PA for 196 days. What do I do with Enter the portion of these wages that is reportable to MI - Should I put 170/366*Wages for MI and 196/366*Wages for PA? Should I have my state taxes returned from MI? It seems like I'll owe PA taxes. But there is also an option to record taxes paid to other states and get credit. How do I solve this in TurboTax? On top of that we have a rental property in MI.
Thank you for your time!

[TomD8 · Accepted solution]

You will owe taxes to both states.  MI can tax you on your income earned while you were an MI resident.  MI can also tax you on all the rental income from your rental property located in MI.

PA can tax you on your income earned after your move to PA, including the portion of your rental income earned after you became a PA resident.  On your PA return, you'll be able to take a credit for taxes paid to MI on that portion of your rental income..

Therefore, you'll have to file a part-year resident return in each of the two states.  This TurboTax FAQ explains how to do that:  https://ttlc.intuit.com/questions/1901227-how-do-i-file-a-part-year-state-return

Finally, you should submit Michigan Form MI-W4 to your Michigan employer, advising them that you are no longer subject to MI withholding.  Here's a link to that form: http://www.michigan.gov/documents/mw4f_76761_7.pdf

If your employer is able/willing to withhold PA taxes, you should ask it to do so.  If not, you should considered paying estimated state taxes to PA.

[Z1]

Thanks TomD8! I figured I'll have to do part-year resident return. Does that mean that 'Enter the portion of these wages that is reportable to MI' should be 170/366*Wages? Thank you again!

[TomD8]

That method will work as long as your paychecks didn't vary during the year.  You'll find other optional methods here, under Earned Income Allocations: <a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/questions/2895983-how-do-i-allocate-split-income-for-a-part-year-state-retur...>

[Z1]

Thank you! I appreciate your help! Have a happy  New Year!