Retirement Tax in Michigan and Reciprocal Agreements
When considering retirement tax in Michigan, it's important to note that the state offers certain deductions for pension and retirement income, which can affect your Michigan state income tax. Additionally, Michigan has reciprocal agreements with Illinois, Indiana, Kentucky, Minnesota, Ohio, and Wisconsin. If you're a resident of one of these states but work in Michigan, you may be exempt from Michigan income tax on your wages. However, other income sources, such as rental income from Michigan property, may still be subject to Michigan tax. These agreements can significantly impact your residency status and Michigan tax obligations.