According to the Michigan website, you are required to file a Michigan return if you have any income to report.
If you are a resident of Michigan, you can exempt your active duty military pay from your return.
To exempt the active duty military pay from your resident return, follow the steps below in the program
- State Section
- Edit Michigan Resident Return
- Subtractions from Income
- Amount included in MI-1040, line 10, from military retirement benefits due to service in the U.S. Armed Forces or Michigan National Guard. Benefits entered in 1099RRB will automatically carryforward (Taxable Social Security benefits were pulled from federal)
If you are a nonresident of Michigan, stationed in Michigan, none of your active duty military pay is taxable to Michigan. Any other Michigan sourced income is taxable on the Michigan return.
Your nonresident return will not include your active duty pay unless Michigan is listed as the state in Box 15 of the W-2. If you need to manually deduct the active duty military pay from the nonresident return, follow the steps listed below in the program:
- State SectionA
- Edit Nonresident Michigan Return
- Subtractions from Income
- Military pay and Taxable Social Security benefits included on MI-1040, line 10 if attributable to MI
If one spouse is a resident and the other is not, file a nonresident return and complete worksheet 5. Currently, the program does not support worksheet 5 so you will be unable to complete this within the program.
Military Retirement Benefits
Military retirement benefits received for services performed while a servicemember are exempt from Michigan income tax. You can deduct the amount of the retirement benefits to the extent thy are included in your federal adjusted gross income.
To exempt the retirement benefits, follow the steps listed below in the program:
- State Section
- Edit Michigan Resident Return
- Subtractions from Income
- Amount included in MI-1040, line 10, from military retirement benefits due to service in the U.S. Armed Forces or Michigan National Guard. Benefits entered in 1099RRB will automatically carryforward