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of where you live or where your employer's main office is located. , the City holds the employer liable for withholding the tax. Therefore, you do not have to file a Middletown tax return if you work in Middletown but live elsewhere.Exceptions to this: You are subject to tax on all income earned while. 1  If you are a Federal employee working in the City of Middletown and your city tax is not withheld you must file a Middletown tax return.2  If you are self-employed in the City of Middletown and live elsewhere, you must file a Middletown tax return. If you are a Federal employee working in the City of Middletown and your city tax is not withheld you must file a Middletown tax return. 2  If you are self-employed in the City of Middletown and live elsewhere, you must file a Middletown tax return.
Nonresident âWorked in Michigan If you are a resident of another state but worked in Michigan or earned income from a Michigan source, you must file a Michigan state tax return for all wages, salaries and compensation you received from working in Michigan. Use Form MI-1040 and Schedule NR.If you are a resident of Ohio, Indiana, Kentucky, Illinois, Minnesota, or Wisconsin, then Michigan will not tax your work-related income because of reciprocal agreements between Michigan and your state.ven if you spent a lengthy amount of time out of state â perhaps wintering on a beach â as long as you maintained a permanent home in Michigan that you went back to, you are a full-year Michigan resident for tax purposes. You will file your state taxes using Form MI-1040, in addition to your federal tax return.