Question

Do I need to file an additional state if localities are out of state?

Forum|Forum|4 years ago
March 20, 2022
1 reply
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I live in IN and had a remote job in MI. Since they are neighboring states and had reciprocity, I was able to use IN for my state taxes. On my W2, I noticed that Detroit and a "Total" locality were listed. Would I also need to file for MI since the locality was listed? IN was the only state withheld on that W2.

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E

ErnieS0

No. If you didn't have any Detroit tax withheld, then you do not have to file a Michigan return.

Detroit says nonresident and part-year residents:

File a return if you owe tax, are due a refund, or your wages exceed your exemption allowance.
If your wages are less than your personal exemption allowance and City income tax was withheld from your earnings, you must file a return to claim a refund of the tax withheld.

Filing Requirements FAQs

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Hal_Al

Employee

IN & MI have a reciprocal agreement. No MI state taxes are withheld or due and you do not normally need to file a MI return. But IN 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. IN will not give you a credit.

However the reciprocity agreement does not apply to local city taxes. You are not required to file a MI city return. If MI city tax was withheld, You can not get that refunded, unless there was a mistake in the amount.

Most IN counties (but not the state) allow a credit, or partial credit for tax paid to a MI city. That will come up in the IN state interview. (For details, see:

https://ttlc.intuit.com/community/state-taxes/discussion/i-see-no-separate-question-for-school-taxes...