Live in Michigan, Work in Pennsylvania: Which State Taxes Your Paycheck?
Answer
You file twice: Pennsylvania first, then Michigan. There is no reciprocity agreement between these two states, so Pennsylvania taxes the income where it was earned and Michigan taxes it again as resident income — with the resident credit removing the double charge rather than an exemption form preventing it.
Last verified
Without an agreement between Michigan and Pennsylvania, the overlap is handled after the fact rather than prevented. That is why the filing order matters: the Pennsylvania figure is an input to the Michigan return, so completing Michigan first means doing it twice.
A Michigan resident taxed by another state on the same income claims the credit for taxes paid to other states on Form MI-1040 (credit for income tax imposed by another state). The credit is capped at the Michigan tax on that income, so it removes the double tax but never refunds the excess when the other state charges more.
Pennsylvania also has a layer below the state one, and it is the layer that survives every agreement: Pennsylvania's Act 32 earned income tax is levied by municipalities and school districts across the state, and Philadelphia levies its own wage tax on residents and on nonresidents who work in the city. None of it is covered by the reciprocal agreements, and Philadelphia's nonresident wage tax applies from the first dollar.
What you file
- 1Nonresident return · PennsylvaniaForm PA-40 (nonresident)
File the Pennsylvania nonresident return FIRST — you need the Pennsylvania tax figure before you can complete Michigan.
- 2Resident return · MichiganForm MI-1040 (credit for income tax imposed by another state)
File a Michigan resident return reporting all income, then claim the credit for tax paid to Pennsylvania. The credit is capped at what Michigan would have charged on that same income, so if Pennsylvania taxes it at a higher rate the difference is not refunded.
The two states, side by side
| Michigan | Pennsylvania | |
|---|---|---|
| Taxes wages | Yes — flat | Yes — flat |
| Reciprocity partners | 6 (Form MI-W4) | 6 (Form REV-419) |
| Convenience rule | No | Yes — general rule |
| Nonresident return | Form MI-1040 with Schedule NR | Form PA-40 (nonresident) |
| Credit for other-state tax | Form MI-1040 (credit for income tax imposed by another state) | Schedule G-L |
| Nonresident safe harbour | None published | None published |
| Local income tax | Yes | Yes |
| Revenue department | Michigan Department of Treasury | Pennsylvania Department of Revenue |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in Pennsylvania and working in Michigan gives:Both states — credit offsets the double tax.
Same two states, different situation
The withholding answer turns on how you are paid and where the work happens, not only on which two states are involved.
- Remote worker: Michigan → PennsylvaniaConvenience-of-the-employer rule — both states tax you
- 1099 contractor: Michigan → PennsylvaniaHome state, plus the client state if you work there
- Moved mid-year: Michigan → PennsylvaniaTwo part-year returns
Other Michigan pairs
Questions people actually ask
I live in Michigan and work in Pennsylvania. Which state takes the tax out of my paycheck?
You file twice: Pennsylvania first, then Michigan. There is no reciprocity agreement between these two states, so Pennsylvania taxes the income where it was earned and Michigan taxes it again as resident income — with the resident credit removing the double charge rather than an exemption form preventing it.
Which state should my employer be withholding for?
Pennsylvania. The wages are sourced to Pennsylvania, so Pennsylvania withholding is correct and there is no Michigan withholding to set up.
Will I end up paying tax twice on the same income?
Not twice over, but you will pay the higher of the two rates. Michigan gives residents a credit for tax paid to Pennsylvania on the same income, claimed on Form MI-1040 (credit for income tax imposed by another state). The credit is capped at the Michigan tax on that income, so if Pennsylvania taxes it more heavily the excess is not refunded by either state.
How current is this?
The Michigan and Pennsylvania rules on this page were last checked against Michigan Department of Treasury and Pennsylvania Department of Revenue on 2026-08-07. We re-check the full grid every December after state legislative sessions close, and re-check the convenience-of-the-employer states quarterly because that is where the rules move fastest.
Sources
Every fact above comes from the revenue department that publishes the rule. We do not cite secondary summaries, and we do not restate a figure we could not find at source.
- Michigan Department of Treasury — individual income taxaccessed 2026-08-07
- Pennsylvania Department of Revenue — individual income taxaccessed 2026-08-07
- Pennsylvania — Form REV-419accessed 2026-08-07
- Pennsylvania Personal Income Tax Guide — Income Subject to Tax Withholdingaccessed 2026-08-07