Samuel $(25)$ is single and has been a resident of Michigan since before he entered the U$.$S$.$ Navy in $2021.$ In $2023,$ he earned $$3,988$ while stationed in Great Lakes, Illinois. For the remainder of the year, he was aboard the USS Fort Worth, where he earned $$15,768$ for his service in Singapore. He has not returned to Michigan during the tax year. What is Samuel's Michigan filing requirement?

Samuel is required to file a Michigan resident tax return and report all of this income regardless of source, but he can subtract his active duty military pay.

Samuel is required to file a Michigan resident tax return, and all of his active duty military pay is subject to Michigan tax.

Samuel is not required to file a Michigan return because his active duty military pay while serving overseas is exempt from Michigan taxation. Since his overseas military pay is the majority of his earnings for $2023,$ his income is less than the filing threshold.

Samuel is not required to file a Michigan return because none of his active duty military pay is from Michigan sources.