Live in Michigan, work in Indiana
Reciprocity agreement: Indiana doesn't tax your wages at the state level, so Michigan taxes them. Indiana county income tax still applies (Form IT-40RNR). Give your employer Form WH-47 so it stops withholding Indiana state tax; it still withholds the county tax.
State income tax: $5,633 a year
Living in Michigan and working in Indiana, you'd pay about $5,633 in state income tax on $100,000 of wages, $1,633 more than if you worked in Michigan.
Reciprocity agreement: Indiana doesn't tax your wages at the state level, so Michigan taxes them. Indiana county income tax still applies (Form IT-40RNR). Give your employer Form WH-47 so it stops withholding Indiana state tax; it still withholds the county tax.
State tax at different salaries
| Wages | To IN | To MI | Total | If you worked in MI |
|---|---|---|---|---|
| $50,000 | $809 | $1,874 | $2,683 | $1,874 |
| $75,000 | $1,221 | $2,937 | $4,158 | $2,937 |
| $100,000 | $1,634 | $3,999 | $5,633 | $3,999 |
| $150,000 | $2,459 | $6,124 | $8,583 | $6,124 |
| $250,000 | $4,109 | $10,374 | $14,483 | $10,374 |
Single filer, all wages earned in Indiana, 2026 state tax rules, standard deductions. State income tax includes Indiana's average county income tax, which reciprocity does not cover (Form IT-40RNR; no Michigan credit for it is assumed). Other local income taxes are not included.
What to do
- Reciprocity: MI residents working in IN exempt from IN state tax on wages; file Form WH-47 (Certificate of Residence).
- Your employer still withholds Indiana county tax. File Indiana Form IT-40RNR each year to settle it, along with your Michigan resident return.
- Keep a record of the days you work in each state, especially if you sometimes work from home.
Local income taxes
- Indiana: Every Indiana county levies a local income tax. Indiana residents pay the rate of the county they live in on January 1. People who live in another state pay the tax of the Indiana county where they principally work on January 1, and that includes residents of reciprocity states (KY, MI, OH, PA, WI) who file Form WH-47: the reciprocity agreements cover only the state tax.
- Michigan: 24 cities levy income tax; nonresident rate is typically half the resident rate (e.g., Detroit 2.4% resident / 1.2% nonresident; Grand Rapids 1.5%/0.75%). Applies to commuters from reciprocity states too.
Special credit rules
- IN: Reverse-credit arrangements (notably AZ, CA, OR): IN nonresidents from those states claim credit on the IN nonresident return. Separately, IN county income tax is owed by nonresidents on IN-sourced wages (county of principal employment).
Frequently asked questions
Do I pay Indiana income tax if I live in Michigan?
No Indiana state income tax: under the reciprocity agreement Michigan taxes your wages. Indiana county income tax still applies, though: about $1,634 on $100,000 at the average county rate, filed on Form IT-40RNR. MI residents working in IN exempt from IN state tax on wages; file Form WH-47 (Certificate of Residence).
Do I have to file taxes in both Michigan and Indiana?
Usually yes: Indiana's reciprocal nonresident return (Form IT-40RNR) for the county tax, and your resident return in Michigan for the state tax on your wages.
Will I be taxed twice?
Not at the state level: under the reciprocity agreement only Michigan taxes your wages. Indiana county tax still applies, so your total is about $5,633 on $100,000 ($3,999 to Michigan and $1,634 in Indiana county tax).
Related
- Live in Indiana, work in Michigan
- Moving from Michigan to Indiana
- Moving from Indiana to Michigan
- Live in Michigan, work in Ohio
- Live in Michigan, work in Wisconsin
Rules reviewed 2026-09-24 from state revenue departments and the Tax Foundation. Estimates only; confirm with each state's revenue department.