2026 tax year · cross-border wages
Crossing a state line into or out of Michigan
Michigan taxes its residents on income earned anywhere, and taxes non-residents on work done inside it. Which return you file depends on which direction you commute.
Michigan borders 6 states. All of them work the same way for a commuter, so there is one rule to learn.
Where Michigan has a reciprocity agreement
Michigan has wage reciprocity with Illinois, Indiana, Kentucky, Minnesota, Ohio and Wisconsin. Work in one of these and it will not tax your wages at all: you file its exemption certificate with your employer there, which stops its withholding, and report everything to Michigan. There is no nonresident return.
| Work state | Exemption certificate | Its tax on your wages |
|---|---|---|
| Illinois | IL-W-5-NR | $0 |
| Indiana | WH-47 | $0 |
| Kentucky | 42A809 | $0 |
| Minnesota | not in the 2026 dataset, ask the state | $0 |
| Ohio | IT 4NR | $0 |
| Wisconsin | W-220 | $0 |
Kentucky attaches conditions to its agreements, not all of which apply to every partner state: Virginia residents must commute daily; Ohio residents cannot own 20%+ of an S corporation. Check which clause covers a Michigan resident before relying on it.
Reciprocity covers wages paid by an employer. It does not cover self-employment income, so a 1099 worker in Michigan generally still sources income to where the work was done.
What Michigan itself takes across a salary range
A single filer, taking the standard deduction. This is the figure every arrangement above is measured against, the tax Michigan charges a resident, whether the work happened inside the state or over a line:
| Wages | Michigan tax | Effective rate |
|---|---|---|
| $45,000 | $1,913 | 4.25% |
| $70,000 | $2,975 | 4.25% |
| $120,000 | $5,100 | 4.25% |
What Michigan charges as your home state
Michigan applies a single 4.25% rate to taxable income for 2026, so every extra dollar of wages is taxed at the same state rate.
State income tax on wages only, 2026 rates. Not tax advice, what this does and doesn't cover.