Indiana / Michigan tax reciprocity
Each pair below is taxed by the RESIDENCE state, not the work state — the work state agrees not to withhold. Figures are illustrative, on a $75,000 salary.
Who taxes you, and what to file
The certificate goes to your employer in the state you work in. Figures are state income tax on $75,000, single, no dependents.
| Work in | Live in | Certificate to file | Tax under reciprocity | If the work state taxed you |
|---|---|---|---|---|
| Indiana | Michigan | WH-47 | $2,937 | $2,183 |
| Michigan | Indiana | No state form (employer-developed form or letter; MI-W4 line 8b) | $2,183 | $2,937 |
The last column is hypothetical — what the work state would take with no agreement in place. It is not a second bill.
Does this cancel the local city or county tax?
Reciprocity is a state income tax concept. A local wage tax is a separate levy and can survive it.
- Working in Indiana
- Bulletin #33: "Indiana reciprocity agreements do not cover withholding requirements concerning Indiana Local Income Taxes... Employees who are residents of reciprocal states are subject to LIT in the same manner as residents of nonreciprocal states." The WH-47 form repeats the warning on its face.
- Working in Michigan
- RAB 2017-13: "Reciprocal agreements do not apply to independent contractors, local taxes, or income other than compensation." Michigan city income taxes therefore survive reciprocity.
Sources
- Indiana: Indiana Dept. of Revenue — Income Tax Information Bulletin #33 (December 2024) — https://www.in.gov/dor/files/ib33.pdf
- Michigan: Michigan Dept. of Treasury — Revenue Administrative Bulletin 2017-13 — https://www.michigan.gov/taxes/rep-legal/rab/2017-revenue-administrative-bulletins/revenue-administrative-bulletin-2017-13
Run your own Indiana / Michigan numbers
Opens on work in Indiana, live in Michigan. Change the salary, either state, or filing status below.
Indiana / Michigan: common questions
Does Indiana tax Michigan residents who work there?
No. Indiana does not withhold its state income tax from a Michigan resident's wages under the reciprocity relationship in effect for 2026 — that income is taxed by Michigan instead. File WH-47 with your Indiana employer to stop the withholding. Source: Indiana Dept. of Revenue — Income Tax Information Bulletin #33 (December 2024).
Does Michigan tax Indiana residents who work there?
No. Michigan does not withhold its state income tax from an Indiana resident's wages under the reciprocity relationship in effect for 2026 — that income is taxed by Indiana instead. File No state form (employer-developed form or letter; MI-W4 line 8b) with your Michigan employer to stop the withholding. Source: Michigan Dept. of Treasury — Revenue Administrative Bulletin 2017-13.
Does reciprocity also cancel the local city or county tax?
Not necessarily — reciprocity is a state income tax concept, and a local wage tax is a separate levy that can survive it. Indiana: Bulletin #33: "Indiana reciprocity agreements do not cover withholding requirements concerning Indiana Local Income Taxes... Employees who are residents of reciprocal states are subject to LIT in the same manner as residents of nonreciprocal states." The WH-47 form repeats the warning on its face. Michigan: RAB 2017-13: "Reciprocal agreements do not apply to independent contractors, local taxes, or income other than compensation." Michigan city income taxes therefore survive reciprocity.
Does reciprocity cover self-employment or 1099 income?
No. Reciprocity covers employee compensation only, and the scope is set by each state's own materials rather than by a common rule — covers salaries, wages, tips and commissions only; other Indiana-source income remains taxable. Self-employment income, rental income, gambling winnings and pass-through income are outside it, and may still require a nonresident return in the work state.
Other pairs involving these states
See all 32 state reciprocity pairs →