Work in Ohio, Live in Michigan: How Taxes Work

Reciprocity Basics

Do Ohio and Michigan Have a Tax Reciprocity Agreement?

Yes. Ohio has reciprocal agreements with its five bordering states: Indiana, Kentucky, Michigan, Pennsylvania, and West Virginia. Michigan reciprocates with Illinois, Indiana, Kentucky, Minnesota, Ohio, and Wisconsin. The Michigan and Ohio agreement took effect on January 1, 1972.

Under the agreement, a Michigan resident is in effect exempt from Ohio income tax on salaries, wages and commissions earned for personal services performed in Ohio, and pays Michigan income tax on them instead. The reverse applies to Ohio residents working in Michigan. The agreement covers compensation only: it does not cover Ohio-sourced business income, rental or royalty income, capital gains, non-employee wages, or lottery, casino and sports gaming winnings. Compensation from a pass-through entity that you own at least 20% of is excluded too, because Ohio reclassifies it as a distributive share of the entity's income.

The agreement is limited to state income tax. Ohio cities and villages levy their own income taxes on income earned within their limits, and reciprocity does not change that.

Filing Returns

Which Tax Returns Do I File as a Michigan Resident Working in Ohio?

Report all wages on your Michigan MI-1040. Michigan's rate for 2026 is 4.25 percent, applied after the personal exemption; the 2026 exemption amount in Michigan's withholding guide is $5,900. Because of reciprocity, a full-year Michigan resident whose only Ohio-sourced income is wages does not have to file an Ohio IT 1040.

If Ohio state tax was withheld anyway, file an Ohio IT 1040 to get it back (see the last section). The 2025 returns for both states are due April 15, 2026. Ohio has no extension request form but honors the IRS extension. Michigan extends its due date to your federal one if you send Treasury a payment of your remaining estimated tax with a copy of your federal extension (Form 4868) by the original due date.

Ohio municipal returns are due on the same date as the state return, and a federal six-month extension automatically extends the municipal return as well. Whether you must file a city return depends on the city. Ohio law requires an annual return from every taxpayer liable for a municipal tax, while CCA, the collection agency for Cleveland and other municipalities, says you must file only if your employer did not fully withhold for the municipalities where you worked or you earned non-wage income in a CCA municipality.

Employer Withholding

How Do I Stop Ohio State Withholding at My Ohio Job?

Give your Ohio employer a completed Ohio Form IT 4. Employees from reciprocity states complete sections I, III and IV only. In Section III, Withholding Waiver, check the box that reads 'I am a full-year resident of Indiana, Kentucky, Michigan, Pennsylvania, or West Virginia.' Checking it tells your employer not to withhold Ohio income tax or school district income tax. The form cites R.C. 5747.05(A)(2) for this exemption.

The current IT 4 replaced the older IT 4NR, IT 4 MIL and IT MIL SP forms as of December 7, 2020. It is not filed with the Department of Taxation; your employer keeps a copy in its records. If you move during the tax year, complete an updated IT 4 immediately with your new address.

An Ohio employer does not have to withhold Michigan tax, but it may voluntarily register with Michigan Treasury and withhold Michigan income tax, so ask payroll. If no Michigan tax is withheld and you expect to owe more than $500 when you file, Michigan expects quarterly estimated payments on Form MI-1040ES.

Local Payroll Tax

Do Ohio City Income Taxes Apply if I Live in Michigan?

Yes. Reciprocity covers state income tax only. Ohio cities and villages levy municipal income taxes under Ohio Revised Code Chapter 718 on the income of people who live in the city and of people who earn income there. If your Ohio worksite is in a city with an income tax, such as Toledo, Cleveland, Cincinnati, Columbus, Akron or Dayton, your employer withholds that city's tax from your pay.

A city must tax income at one uniform rate, so nonresidents pay the same rate as residents. Rates differ from city to city, and a rate above 1 percent requires the approval of the city's voters. Toledo and Cleveland charge 2.5 percent; Toledo states that residents and non-residents working in the city are subject to its 2.5 percent tax. Confirm your worksite's rate with the city's tax office before filing.

Ohio school district income tax is based on residence. Only Ohio residents who lived in a taxing school district pay it, so as a Michigan resident you do not owe it even if your worksite is inside a taxing district.

MI Credit for OH City Tax

How Do I Claim a Michigan Credit for Ohio City Tax Paid?

Yes. Michigan allows a credit for income tax paid to a local government unit outside Michigan, including local units in reciprocal states such as Ohio. Claim it on line 18 of the MI-1040, Income Tax Imposed by Government Units Outside Michigan, and include a copy of the return you filed with the city.

The credit cannot exceed the smaller of the city tax or the Michigan tax due on the wages earned in Ohio. Michigan figures that second amount by dividing the income taxed by both by your total income subject to Michigan tax (MI-1040 line 14) and applying that share to your Michigan tax on line 17. At Toledo's 2.5 percent, the city tax is well below Michigan's tax on the same wages, so in the example below the full city tax is credited and Michigan collects the rest.

Keep your pay stubs, W-2 and the city return with your Michigan records. The credit only offsets Michigan tax on wages the city also taxed, not Michigan tax on your other income.

Worked Example: Michigan Resident Earning $60,000 at a Toledo Job

Single filer, all work at a Toledo worksite, 2026 figures: Michigan's 4.25% rate and the $5,900 personal exemption from Michigan's 2026 withholding guide, and Toledo's 2.5% city income tax. Other income, deductions and credits are ignored. Illustrative, not tax advice.

Remote Work

What if I Work Remotely From Michigan for an Ohio Employer?

For state tax, remote days change nothing. Under reciprocity, Michigan taxes all of your wages as a resident and Ohio taxes none of them, whether you work at the Ohio site or at home.

City tax is different, because an Ohio city taxes income earned within its limits. If your employer withholds city tax on all of your pay, you can ask the city for a refund of the tax for days you worked outside it. Toledo uses a Non-Resident Refund Worksheet (NRR) for non-residents whose W-2 wages had Toledo tax withheld while they worked outside Toledo, and a refund request is not considered valid without a completed employer certification. CCA's refund application asks for a letter from your employer verifying the days worked outside the employment municipality, plus supporting proof such as a telework agreement.

Keep a dated log of where you worked each day. The refund forms come from the city tax office, not from your employer; your employer certifies the days.

Part Year Residency

What Happens if I Move Between Michigan and Ohio During the Year?

If you move between the two states during the year, you file part-year returns. Michigan uses the MI-1040 with Schedule NR to split your income between the residency periods, and Ohio uses the IT 1040 for the part of the year you lived in Ohio.

Reciprocity covers your Ohio wages only while you are a Michigan resident. On the Ohio return, the reciprocity wages deduction is for compensation earned in Ohio during the portion of the year that you were a resident of a reciprocity state such as Michigan. For the months you lived in Ohio, Ohio taxes your income as a resident.

Document your exact move date with records such as a lease or closing date, utility start dates and an updated driver's license. Give your employer an updated IT 4 immediately after the move and check the next pay stub.

Withholding Errors

What if My Employer Withheld Ohio State Tax by Mistake?

If Ohio state tax was withheld even though you gave your employer an IT 4, file an Ohio IT 1040 to get it back. Your Ohio wages go on line 14 of the Ohio Schedule of Adjustments, Reciprocity Wages, which is for compensation earned in Ohio while you were a resident of a reciprocity state, and the tax withheld is refunded. Attach the W-2 that shows the Ohio withholding.

Do not claim Ohio state withholding as a credit on your Michigan return; recover it from Ohio. A common cause is a payroll system that never applied the IT 4. Check your first pay stub each January to confirm that no Ohio state tax is withheld, and if it is, give payroll a new IT 4 in writing. That stops future withholding, but amounts already withheld come back only through the Ohio return.