Determination engine

Which state do you actually withhold in?

Reciprocity, convenience-of-the-employer, nonresident thresholds and unemployment localization, applied together to one employee's facts. Every answer cites the state source it came from.

Withhold Ohio income tax.

Michigan and Ohio have a reciprocal agreement, so the work state stands down once the exemption certificate is on file.

Income tax withheld to

Ohio

Flat 2.75%

Employee certificate

MI-W4

Employee's Michigan Withholding Exemption Certificate (reciprocal-state exemption line)

Unemployment insurance

Michigan

Localized under factor 1: Localization.

Reciprocal agreement

Yes

Michigan exempts Ohio residents.

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File MI-W4 with the employer

Reciprocity is not automatic. Until the employee files MI-W4 (Employee's Michigan Withholding Exemption Certificate (reciprocal-state exemption line)) you are legally required to withhold Michigan tax. Keep the signed form on file; it is not sent to the state.

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Withhold Ohio income tax instead

Under the agreement the employee is taxed only by their state of residence. You will need a Ohio withholding account.

Reciprocity does not cover Michigan local taxes

24 Michigan cities levy a municipal income tax (Detroit at 2.4% resident / 1.2% nonresident; most others 1% resident / 0.5% nonresident). Employers in those cities must withhold city tax separately. Michigan's state reciprocity agreements do NOT exempt an employee from Michigan CITY income tax on work physically performed in the city -- Detroit in particular taxes nonresidents on Detroit workdays.

Ohio has local income taxes at the residence

Ohio has the most extensive local income tax system in the country -- roughly 600 municipalities and 180+ school districts levy income taxes, withheld by employers. Municipal tax is generally owed where the work is physically performed (subject to a 20-day occasional-entrant rule); school district tax is generally owed based on the employee's residence school district (Form IT 4 identifies it). CRITICAL: Ohio's state reciprocity agreements do NOT exempt a nonresident from Ohio MUNICIPAL income tax on work performed in an Ohio city.

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Employer registrations you will need

Ohio — Income tax withholding: Ohio Department of Taxation
Michigan — Unemployment insurance: Michigan Unemployment Insurance Agency (UIA)

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Get the form

MI-W4 — Michigan (official state source)

Michigan profile Ohio profile Full write-up for this pair

Change the inputs

Withholding determination

Answer six questions. The result is a shareable link, so you can paste it into a ticket or an email.

Employee lives inState of residence

Work is performed inWhere the employee physically sits

Employer is based inWhere the work is directed from

Days in the work stateThis calendar year, leave blank if unknown

Wages from work-state daysUS dollars, leave blank if unknown

Arrangement Works remotely rather than at an employer location Remote work is an employer necessity, not employee preference

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This is a determination aid, not advice. StateSide encodes published state rules and applies them mechanically to the facts you enter. It does not know your entity structure, your nexus history, your equity compensation, or the dozens of exceptions that turn a clean rule into a judgement call. Every determination cites the state source it came from — verify against that source, and take anything consequential to a payroll tax professional before you act on it.