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 Wisconsin income tax.

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

Income tax withheld to

Wisconsin

Graduated, top rate 7.65%

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 Wisconsin 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 Wisconsin income tax instead

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

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Employer registrations you will need

Wisconsin — Income tax withholding: Wisconsin Department of Revenue
Michigan — Unemployment insurance: Michigan Unemployment Insurance Agency (UIA)

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Get the form

MI-W4 — Michigan (official state source)

Michigan profile Wisconsin 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.