The state of Michigan has a flat tax of 4.25%.

What defines residency?

To be considered a resident of the state of Michigan you need to maintain a permanent home with in the state for the entire tax year. If you happen to spent a long period of time out of state, for example a winter home in a warmer climate, if you keep a permanent residence in the state of Michigan that you return to you are considered a full-year resident for tax purposes.

Residents working across state lines.

If you happen to make wages in the following states you will not be taxed twice by the employing state and Michigan; Illinois, Indiana, Kentucky, Minnesota, Ohio or Wisconsin. The state of Michigan maintains reciprocal tax agreements with the aforementioned states, which means that they agree not to tax workers who maintain a legal residence in Michigan. If you happen to work in one of those states and they withhold income tax, you have sole reasonability to file for a refund. You can file a nonresident tax return in the state you earned wages.

Michigan residents who happen to earn wages in states that do not hold a reciprocal agreement or in a province in Canada you are require to report the wages to the state of Michigan so that it may tax the wage earned out of state. All income earned independent on the source is subject to Michigan state tax.