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Old 03-25-2014, 11:03 AM
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I have to pay MI taxes just because I filed a federal Joint return with person who is a resident of MI?

Hi All, I have been a resident of North Carolina for all of 2013 and some of 2012, I have my car registered, my full time job, my apartment. I never intend to return to my old state of MO, or to ever move to MI (where my wife lives).

Due to Job and Family, my Wife has lived in Michigan all of 2013, and some of 2012. She too has a part time job, car, and family Home in Michigan. Will probably never move to NC or return to MO.

Clearly, NC allows me to File a Joint Federal Return, and a Individual State Return. Filing Requirements

I filed a Joint Federal return, using my address in NC, and my USAA bank in Tx.

Michigan is where I have the question. In the MI-1040 instructions it says :Who Must File a Joint Return. File a joint Michigan return if you filed a joint federal return. If you and your spouse filed separate federal returns, you may
file separate or joint Michigan returns. You may file a joint return only with your spouse.
michigan.gov/documents/taxes/1040_Book_443494_7.pdf

Because NC does not adjoin MI, there is no automatic reciprocity agreement, and due to tax exemptions I pay a very low effective tax rate in NC. While the MI tax rate is a flat 4.25%, I would have no exemptions, and would have to pay income tax.

Am I misunderstanding it, that I have to file a Joint MI tax return? Common sense would say I only need to have my wife file, after all she is a resident and has income in MI, and I have neither. Is it right that I have to pay MI taxes just because I filed a federal Joint return with person who is a resident of MI?

Thanks



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Old 03-26-2014, 12:21 PM
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Quote:
Originally Posted by GordonD View Post
Hi All, I have been a resident of North Carolina for all of 2013 and some of 2012, I have my car registered, my full time job, my apartment. I never intend to return to my old state of MO, or to ever move to MI (where my wife lives).

Due to Job and Family, my Wife has lived in Michigan all of 2013, and some of 2012. She too has a part time job, car, and family Home in Michigan. Will probably never move to NC or return to MO.

Clearly, NC allows me to File a Joint Federal Return, and a Individual State Return. Filing Requirements

I filed a Joint Federal return, using my address in NC, and my USAA bank in Tx.

Michigan is where I have the question. In the MI-1040 instructions it says :Who Must File a Joint Return. File a joint Michigan return if you filed a joint federal return. If you and your spouse filed separate federal returns, you may
file separate or joint Michigan returns. You may file a joint return only with your spouse.
michigan.gov/documents/taxes/1040_Book_443494_7.pdf

Because NC does not adjoin MI, there is no automatic reciprocity agreement, and due to tax exemptions I pay a very low effective tax rate in NC. While the MI tax rate is a flat 4.25%, I would have no exemptions, and would have to pay income tax.

Am I misunderstanding it, that I have to file a Joint MI tax return? Common sense would say I only need to have my wife file, after all she is a resident and has income in MI, and I have neither. Is it right that I have to pay MI taxes just because I filed a federal Joint return with person who is a resident of MI?

Thanks
I have to pay MI taxes just because I filed a federal Joint return with person who is a resident of MI? ==============>>>>>>>I do not think so UNLESS you earn taxable income in MI as a full year/Part year or non resident of MI.




Because NC does not adjoin MI, there is no automatic reciprocity agreement, and due to tax exemptions I pay a very low effective tax rate in NC. While the MI tax rate is a flat 4.25%, I would have no exemptions, and would have to pay income tax.=============>>>>>>>Correct aslongas MI tax rate > NC rate, you neeed to pay additional tax to MI.

Am I misunderstanding it, that I have to file a Joint MI tax return? Common sense would say I only need to have my wife file, after all she is a resident and has income in MI, and I have neither. Is it right that I have to pay MI taxes just because I filed a federal Joint return with person who is a resident of MI?=================>>>>>>>As said, UNLESS you earned taxable MI source income that you earned in MI you do not need to file your MI return jointly with your spouse that is a full year resident of MI. So you can still file your fed return as MFJ and do notneed to file your MI return as you did not earn any MI source taxable income in MI but you need to file your NC as MFS UNLESS your spouse wants to file NC return with you jointly. Normally, states require that you file in the same way you filed your federal tax return. However as you and your wife live in two different states, AND neither of you has any income from sources in the other's home state, THEN you can each file as Married Filing Separately for your home state income tax return, even though you filed as Married Filing Jointly on your federal return. In this way you are taxed by NC on your income, she is taxed by MI on her income, and neither has to report your income to the other's state. You need to consult the tax publications in the individual state of MI for those rules, as each state has its own rules.



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Old 03-26-2014, 03:21 PM
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Thanks

Thanks, The way you say makes sense. I wish the MI-1040 instructions was as clear as you. MI seems to assume if you filed MFJ for federal, then you both lived together in MI, and therefore would have to file MFJ for MI too. I will keep looking for reference in the MI Tax code. Thanks for the clarification.



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