How does Michigan tax remote workers?

There are a few situations to consider. You may fall into more than one category.

1. I lived in Michigan.
• If you're considered a resident or part-year resident of Michigan, you'll be taxed on all income earned from any source during your time of residency. Be sure to file the appropriate return.
2. I worked remotely from Michigan.
• Michigan taxes income earned for personal services performed while in Michigan (even if you're a nonresident). This includes remote work for an employer or clients based outside Michigan if you were physically in the state while doing the work.
• If you were a resident of Illinois, Indiana, Kentucky, Minnesota, Ohio, or Wisconsin and worked remotely in Michigan, then you aren't required to pay Michigan income taxes on that income.
• You may be able to claim a credit for taxes paid to another state on your Michigan resident return for any income required to be reported in multiple states.
3. My employer was based in Michigan.
• If your employer was based in Michigan, they may have withheld Michigan taxes from your wages as shown on your W-2. However, as long as you didn't live or work in Michigan, you will not owe Michigan taxes on those wages and can file a nonresident return to claim a refund of those withholdings.
• If your employer didn't withhold Michigan taxes and you were a nonresident of Michigan, you probably don't need to file a Michigan return at all unless you otherwise have a Michigan nonresident filing requirement.

If your wages were minimal and you didn't do any other business in Michigan, it's possible you will be exempt from filing regardless of residency. See the Michigan MI-1040 instructions for more information.