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I lived full-time in Massachusetts in 2021. I have a rental property in another state (Michigan) and in 2021 I had rental income. This is reported on my federal tax return for 2021. Do I still need to file a Michigan tax return for year 2021?

This year for me is different because I am using H&R Block software to file my returns. Last year I used a tax prepare service and they filed the Michigan tax return 2020 for me, even though the income taxable was $0. I think they just noted on the MI-1040NR schedule 1 that the income was attributable to another state, which is MA. Should I do the same thing this year, or just not file the Michigan tax return at all?

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  • In most cases even if you expect to have $0 in taxable income, you need to file to document that. Otherwise the state may assume that you did have taxable income and try to collect it.
    – jwh20
    Mar 15, 2022 at 13:56
  • The same reason for filing last year applies to this year (more so, since there actually is income, whether or not it is attributable to another state). Depending on MI law, you may owe taxes in both MI and MA. (Some states have reciprocity treaties which reduce or eliminate the tax you owe in the state where you do not live; I don't know if MI and MA have any such agreements.)
    – chepner
    Mar 15, 2022 at 14:32

1 Answer 1

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Do I still need to file a Michigan tax return for year 2021?

Yes.

Should I do the same thing this year

No.

The taxable income is not $0. Rental income earned from the property in Michigan is attributable to Michigan. You're also taxed on it in Massachusetts, so you should be getting credit in one State for the taxes paid in the other (probably in MA for MI taxes).

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  • @user102008 actually you're right, in this case it's going to be MA giving the credit
    – littleadv
    Mar 17, 2022 at 3:23

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