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REMOTE EMPLOYEES

Hiring a remote employee in Michigan

Your company is in another state and one employee lives and works from home in Michigan. Which state's taxes apply, unemployment, paid leave and Michigan's employer rules, each with its official source.

Facts checked on October 5, 2026 against the official sources listed at the end of this page. For employers. General information, not legal or tax advice: confirm a rule with the agency before you rely on it.

Michigan at a glance

Income tax
Michigan withholding
Reciprocity
With Illinois, Indiana, Kentucky, Minnesota, Ohio and Wisconsin
Unemployment
$9,000 wage base, 2.7% new employer
Paid leave
None
New hire report
Within 20 days

Which state's taxes apply

Work state
Michigan taxes wages for work done in Michigan. Withhold Michigan income tax on the employee's wages.Source: Michigan Treasury, Form 446, 2026 Michigan Income Tax Withholding Guide (Rev. 02-26, PDF) (opens in a new tab), checked October 5, 2026
Withholding form
Form MI-W4Source: Michigan Treasury, Form 446, 2026 Michigan Income Tax Withholding Guide (Rev. 02-26, PDF) (opens in a new tab), checked October 5, 2026
Reciprocity
If your office is in Illinois: Michigan residents working there are withheld for Michigan, with IL-W-5-NR. If your office is in Indiana: Michigan residents working there are withheld for Michigan, with WH-47. If your office is in Kentucky: Michigan residents working there are withheld for Michigan, with Form K-4 (box 4) or 42A809. If your office is in Minnesota: Michigan residents working there are withheld for Michigan, with Form MWR. If your office is in Ohio: Michigan residents working there are withheld for Michigan, with IT 4 (Section III). If your office is in Wisconsin: Michigan residents working there are withheld for Michigan, with Form W-220.Source: IDOR, Form IL-W-5-NR, Employee's Statement of Nonresidence in Illinois (PDF); Publication 130 (February 2026) (opens in a new tab), checked October 5, 2026; Indiana DOR, Income Tax Information Bulletin #28 (December 2024, PDF) (opens in a new tab), checked October 5, 2026; Kentucky Department of Revenue, Form K-4 Kentucky's Withholding Certificate 2026, 42A804(12-2025) (PDF) (opens in a new tab), checked October 5, 2026; Minnesota Department of Revenue, 2026 Minnesota Income Tax Withholding Instruction Booklet and Tax Tables (PDF) (opens in a new tab), checked October 5, 2026; Ohio Department of Taxation, Form IT 4, Employee's Withholding Exemption Certificate (Rev. 01/24, PDF) (opens in a new tab), checked October 5, 2026; Wisconsin DOR, Form W-220, Nonresident Employee's Withholding Reciprocity Declaration (R. 7-22, PDF) (opens in a new tab), checked October 5, 2026
Convenience rules
If your company is in Delaware, New York or Pennsylvania, the employee is assigned to an office there and works there on some days, that state taxes the days worked from home in Michigan for the employee's convenience.Source: Delaware Division of Revenue, 2025 Form PIT-NON Instructions, Non-Resident Individual Income Tax Return (PDF) (opens in a new tab), checked October 6, 2026; NYS DTF, TSB-M-06(5)I, New York Tax Treatment of Nonresidents and Part-Year Residents: Application of the Convenience of the Employer Test to Telecommuters and Others (May 15, 2006, PDF) (opens in a new tab), checked October 6, 2026; PA Department of Revenue, PA Personal Income Tax Guide, Gross Compensation (opens in a new tab), checked October 6, 2026
Office days in your company's state
That state's day limit, if it has one, decides whether it withholds on those days: see its page, or the helper below.
An employee from another state working in Michigan
Michigan sets no day count before a nonresident's wages for work there are withheld.Source: Michigan Department of Treasury, 446 (Rev. 02-26), 2026 Michigan Income Tax Withholding Guide (PDF) (opens in a new tab), checked October 6, 2026

Where to withhold: two states

Pick your company's state, the state where the employee lives and works from home, and the days a year the employee works at your office. The answer reads each state's rules from the data on these pages.

Your company is in
Employee lives and works from home in
Days a year at your office
Assigned to an employer office in New YorkMatters only in the states with a convenience rule (Connecticut, Delaware, New Jersey, New York and Pennsylvania), and only with office days there.

Income tax withholding

  • Michigan: all wages.

No New York withholding: the employee does no work in New York.

Unemployment

Michigan: the employee works from home there, so the work is localized in Michigan.

Simplified: resident credits, dollar tests, local taxes and a move during the year are not worked out here. Each state's rule and its source are on its page.

Unemployment

The employee works from home in Michigan, so the work is localized in Michigan: pay Michigan unemployment tax, not your company state's.

Agency
Michigan Unemployment Insurance Agency (UIA)Source: Michigan LEO, UIA Resources for Employers (opens in a new tab), checked October 5, 2026
Wage base
$9,000 Fixed by lawSource: Michigan UIA, FAQ: Taxable Wage Base (opens in a new tab), checked October 5, 2026
New employer rate
2.7% 2.7% for the first two years of liability; construction employers pay the average construction-industry rate instead (5.0% for 2026) Surcharges included Construction 5%Source: Michigan UIA, Unemployment Insurance Taxes (Tax Rate Summary for 2026) (opens in a new tab), checked October 5, 2026

Open the account: Michigan payroll tax registration

Michigan has no paid leave program funded through payroll.

Michigan employer rules

Employment law applies where the employee works, so these follow the employee into Michigan.

Final pay
Fired: By the regular payday for the pay period in which the employee was discharged Quit: By the regular payday for the pay period in which the employee quitSource: Michigan LEO Wage and Hour, Payment of Wages and Fringe Benefits Act (PA 390 of 1978) (opens in a new tab), checked October 6, 2026
Pay frequency
Weekly, biweekly, semimonthly or monthly, on a regular scheduleSource: Michigan LEO Wage and Hour, Payment of Wages and Fringe Benefits Act (PA 390 of 1978) (opens in a new tab), checked October 5, 2026
Pay notice
No pay-rate notice at hire. Each payday, employees must get a pay statement they can keep, showing hours worked, gross wages, itemized deductions and the pay period dates.Source: Michigan LEO Wage and Hour, Payment of Wages and Fringe Benefits Act (PA 390 of 1978) (opens in a new tab), checked October 5, 2026
New hire reporting
Within 20 days of the date of hire.Source: Michigan New Hires Operation Center (MDHHS Child Support Division), Employer Services Portal (opens in a new tab), checked October 5, 2026
E-Verify
State contractors only: every state department must make its prequalified contractors and subcontractors use E-Verify for everyone they hire during the contract term. The rule is set each year in the state budget act.Source: Michigan Public Act 22 of 2025 (fiscal year 2026 omnibus budget), e.g. Art. 5 (General Government) Sec. 220 (opens in a new tab), checked October 5, 2026
Sick leave
Paid sick leave required, from the first employee. Small business: 10 or fewer employees; 1 hour per 30 worked, use may be capped at 40 hours a year. 11 or more employees for 20 or more workweeks in the current or prior year; 1 hour per 30 worked, use may be capped at 72 hours a year.Source: Michigan LEO Wage and Hour, Earned Sick Time Act FAQ (PDF) (opens in a new tab), checked October 5, 2026

When the employee moves

Re-check the work state and the registrations before the next payroll: a move changes which state's withholding, unemployment, paid leave and employer rules apply.

Registering your business in Michigan, and whether one remote employee creates tax nexus for your company, are separate questions this page does not cover.

More on Michigan

WORKLIO HCM

Payroll for employees who work from home in another state

Worklio HCM withholds by home and work state, reciprocity included, and handles city and county taxes. We help open state withholding and unemployment accounts when you hire somewhere new, and our registration service can register your employer tax accounts for you. Taxes are calculated, deposited and filed in every state and locality, and when an agency notice arrives, you upload it and our tax team resolves it.

Remote employees in other states

Sources

The agency page or document behind each fact, as checked.

General information, not legal or tax advice. Rules change; confirm current requirements with the relevant agency or your advisor. You remain responsible for your employment taxes and for each state's rules.

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