Live in Virginia, Work in Michigan: Which State Taxes Your Paycheck?
Answer
Both states tax the same wages, and a credit undoes the overlap. Michigan withholds as your work state and you file a Michigan nonresident return; Virginia taxes residents on all income, so you also file at home and claim the credit for tax paid to Michigan. File Michigan first.
Last verified
Two states can lawfully tax the same wages: Michigan because the work happened there, Virginia because you live there. Nothing prevents the overlap in advance — it is unwound afterwards, on the Virginia return, through the credit for taxes paid to another state.
A Virginia resident taxed by another state on the same income claims the credit for taxes paid to other states on Schedule OSC. The credit is capped at the Virginia tax on that income, so it removes the double tax but never refunds the excess when the other state charges more.
Michigan also has a layer below the state one, and it is the layer that survives every agreement: Two dozen Michigan cities levy their own income tax, Detroit among them, and the state reciprocal agreements do not cover city tax. A reciprocal-state resident working in Detroit still owes Detroit.
What you file
- 1Nonresident return · MichiganForm MI-1040 with Schedule NR
File the Michigan nonresident return FIRST — you need the Michigan tax figure before you can complete Virginia.
- 2Resident return · VirginiaSchedule OSC
File a Virginia resident return reporting all income, then claim the credit for tax paid to Michigan. The credit is capped at what Virginia would have charged on that same income, so if Michigan taxes it at a higher rate the difference is not refunded.
The two states, side by side
| Virginia | Michigan | |
|---|---|---|
| Taxes wages | Yes — graduated | Yes — flat |
| Reciprocity partners | 5 (Form VA-4) | 6 (Form MI-W4) |
| Convenience rule | No | No |
| Nonresident return | Form 763 | Form MI-1040 with Schedule NR |
| Credit for other-state tax | Schedule OSC | Form MI-1040 (credit for income tax imposed by another state) |
| Nonresident safe harbour | None published | None published |
| Local income tax | No | Yes |
| Revenue department | Virginia Department of Taxation | Michigan Department of Treasury |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in Michigan and working in Virginia 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: Virginia → MichiganHome state only
- 1099 contractor: Virginia → MichiganHome state, plus the client state if you work there
- Moved mid-year: Virginia → MichiganTwo part-year returns
Other Virginia pairs
Questions people actually ask
I live in Virginia and work in Michigan. Which state takes the tax out of my paycheck?
Both states tax the same wages, and a credit undoes the overlap. Michigan withholds as your work state and you file a Michigan nonresident return; Virginia taxes residents on all income, so you also file at home and claim the credit for tax paid to Michigan. File Michigan first.
Which state should my employer be withholding for?
Michigan. The wages are sourced to Michigan, so Michigan withholding is correct and there is no Virginia 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. Virginia gives residents a credit for tax paid to Michigan on the same income, claimed on Schedule OSC. The credit is capped at the Virginia tax on that income, so if Michigan taxes it more heavily the excess is not refunded by either state.
How current is this?
The Virginia and Michigan rules on this page were last checked against Virginia Department of Taxation and Michigan Department of Treasury 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.
- Virginia Department of Taxation — individual income taxaccessed 2026-08-07
- Virginia — Form VA-4accessed 2026-08-07
- Virginia Tax — Reciprocityaccessed 2026-08-07
- Michigan Department of Treasury — individual income taxaccessed 2026-08-07