You are a Michigan resident if Michigan is your permanent home. Your permanent home is the place you intend to return to whenever you go away. A temporary absence from Michigan, such as spending the winter in a southern state, does not make you a part-year resident. Income earned by a Michigan resident in a nonreciprocal state (see “Reciprocal States”) or Canadian province is taxed by Michigan, and may also be taxed by the other jurisdiction. If you pay tax to both, you can claim a credit on your Michigan return. See instructions for MI-1040, line 18 and the example on page 11.
You are a part-year resident if, during the year, you move your permanent home into or out of Michigan. You must pay Michigan income tax on income you earned, received, or accrued while living in Michigan
Use Schedule NR to figure your Michigan taxable income. You must pay Michigan income tax on the following types of income:
• Salary, wages, and other employee compensation for work performed in Michigan, unless you live in a state covered by a reciprocal agreement (see “Reciprocal States”)
• Net rents and royalties from real and tangible personal property in Michigan
• Capital gains from the sale or exchange of real property located in Michigan, or of tangible personal property located in Michigan
• Patent or copyright royalties if the patent or copyright is used in Michigan or if you have a commercial domicile in Michigan
• Income (including dividend and interest income) from an S corporation, partnership or an unincorporated business, or other business activity in Michigan
• Lottery winnings
• Prizes won from casinos or licensed horse tracks located in Michigan. Nonresidents from reciprocal states must also declare these prizes as taxable.