State Tax Witholdings

[Bimaculatis]

I live in MI but am working onsite in WI for a client. I opted to rent an apartment in WI close to the site as this was the cheapest option compared to traveling/hotel fees. This was not an issue as my office location was in MI and taxes were being taken out for MI. Now, however, my company has switched my office to WI. I have read that WI and MI have a reciprocity agreement, but now I'm wondering if renting an apartment in WI complicates the tax issue. Am I legally required to declare the WI apartment as my residence since I am staying there for work? Can I leave my residence as my MI address and continue to have taxes taken out for MI only? 

I am not sure what the best approach is and would greatly appreciate any advice!

[PoojaT27]

@Bimaculatis thank you for participating in our event today.

That is correct WI and MI are reciprocal states which implies that you can live in one state and work in the other and only have tax withholding for your resident state. In your case MI is/was the resident state and WI is the state you are working in.

The state of Wisconsin will consider you a resident for tax purposes if you maintain domicile in WI. A "domicile" is a person's true, fixed, and permanent home where a person intends to remain permanently and indefinitely and to which a person has the intention of returning, whenever absent. It is often referred to as "legal residence." A person may be physically present, working or living in one place but maintain a domicile in another. A person has only one domicile at any point in time.

If you are still maintaining a home in MI and plan to move back to MI after your onsite work is completed in WI, then you are still a resident of MI and you can have taxes taken out for MI and file as a resident of MI. The information you provided here is not enough for me to make a determination about your domicile.

I have included a couple of links here for more information.

Legal Residence/Domicile of Wisconsin

What is a state reciprocal agreement? 

[mikafeed58]

Reciprocity applies to situations where you work in one state, but live in another. Since this is not the case in your situation, you will need to file a Wisconsin return at least as a Part Year Resident, depending on how long you lived there. The same goes for Michigan. 

I am attaching a link to the Wisconsin Department of Revenue (Publication 122) as well as the definition of domicile for WI purposes which will give you further information on this issue: 

https://www.revenue.wi.gov/Pages/Individuals/nonresidents.aspx

A legal resident of Wisconsin is a person who maintains his or her domicile in Wisconsin, whether or not s/he is physically present in Wisconsin or living outside of the state.