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FAQs

Frequently Asked Questions (FAQS)

1.    What is the history of the City of Detroit Income Tax Ordinance?

Detroit Ordinance No. 900-F was adopted by the Common Council (City Council) on September 15, 1964 and approved by Mayor Jerome P. Cavanaugh on September 18, 1964, becoming effective on January 1, 1965. The ordinance replaced prior Income Tax Ordinance No. 694-F, which took effect July 1, 1962.

Michigan cities are authorized to levy a city income tax upon adoption of a uniform ordinance prescribed by the legislature, and a number of cities have done so. The tax levied is a flat tax at limited rates on income. Withholding and estimated taxes are both required. The uniform ordinance sets forth apportionment provisions to determine the income amounts of non-residents and of businesses that conduct business activities, within and outside of the city, that are subject to tax. Refer to: The City Income Tax Act, Act No. 284 of the Public Acts of 1964 as amended.

2.    Will you mail me the income tax forms?

The City will not be mailing tax forms except for Withholding Booklet and Estimated Tax Vouchers. The tax returns, instructions and other income tax forms can be downloaded from the Income Tax page.  All tax forms, from 1998 to current, are published on City's Web site.

The City will print flat forms and instructions for distribution to Community Access Centers (formerly Neighborhood City Halls) and the Detroit Public Library.  Citizens may also pick up tax forms from the Income Tax office in the Coleman A. Young Municipal Center, 2 Woodward Avenue - Suite 130, Detroit, MI 48226, during business hours (8 a.m. - 4 p.m. weekdays).

3.    What are the tax rates?
  Resident:  2.4%
  Non-resident:  1.2%
  Corporations:  2.00%
                                                     
                                                                                  
4.    What are the personal exemptions?

Effective tax year 2005, personal tax exemptions reduced from $750 to $600.


5.     Where should the returns be mailed?

They should be mailed to City of Detroit Treasurer P.O. Boxes:

(Please refer to the tax return for appropriate address as given below)


   P.O. Box Addresses  Used for Tax Forms


 1  

City of Detroit
P.O. Box 33401
Detroit, MI  48232

D-1040(R) with check
D-1040(L) with check
D-1040(NR) with check
D-1040(EXT) with check

 2    

City of Detroit
P.O. Box 33402
Detroit, MI 48323

D-1040(R) without check
D-1040(L) without check
D-1040(NR) without check
D-1040(EXT) without check
 3
Dept. 21601
Treasurer City of Detroit
Income Tax
P.O. Box 67000
Detroit, MI 48267-0216


D-1040(ES) with & without check

 4
City of Detroit
P.O. Box 33404
Detroit, MI  48232


All Audit Letters    

 5
City of Detroit
P.O. Box 33405
Detroit, MI  48232


D-1120 with & without check
D-1041 & without check
D-1120 (EXT) with & without check

 6
City of Detroit
P.O. Box 33406
Detroit, MI  48232

D-1065 with & without check
D-1065 (EXT)
  7

Dept. 131901
Treasurer City of Detroit   
Income Tax
P.O. Box 67000
Detroit, MI 48267-1319
 D-941/501 Withholdings; with & without check

  8 
 
Dept. 35001
Treasurer City of Detroit   
Income Tax
P.O. Box 67000
Detroit, MI 48267-0350
Assessments; with & without check
  9
Utility Users See the address below:
Wilmington Trust,
National Association Global Capital Markets
25 S. Charles Street, 11th Floor
Baltimore, MD  21201
 Attn: Jay Smith

BY WIRE:

M & T Bank, ABA: 022000046,
Account: Corporate Trust Clearing,
Account NO: 3088001950200.
Ffc  Public Lighting Authority Trust,
 Attn: Jay Smith.

JHSmith@wilmingtontrust.com



6. How are interest and penalties calculated?

The current interest rate on income tax delinquencies is established by the State of Michigan Department of Treasury. This rate changes every six months. Penalty is 1% per month with a maximum of 25% not underpaid if they equal 70% of the tax due on the final return or 70% of the tax due on the return for the charged interest at prevailing per annum interest rates and penalties.

7. What is the Utility Users Tax?


The tax is imposed on users of telephone, gas and electricity services in the city of Detroit and is used exclusively to fund the Police Department. The rate is 5%. The tax is billed by the public utility or resale customer and remitted monthly to the City.

8. How long must I wait for a tax refund?


Claim for refunds are paid normally within 90 days of filing or 45 days after April 30, whichever is later.  Non-residents who work less than 100% of their time within the city of Detroit are required to complete Schedule N on page 2 of the D-1040 (NR).

Effective tax year 2005, the City of Detroit is requiring that non-resident taxpayers who allocate less than 100% of their income to provide the following documentation:

    * A letter from their employer verifying lines 1 and 2 of the Schedule N.  The letter
       should include the name, title and phone number of the person signing the
       letter and should be on the official letterhead of the employer, and

    * Documentation/work-log showing days and locations worked in/out of the city
       of Detroit.

Non-resident taxpayers based in Detroit who work in their homes cannot use those days as days worked outside Detroit.  Regulation 13.2 of the City Income Tax Ordinance provides that: “The mere fact that a non-resident employee takes work home with him and performs such work at his home does not permit allocation of compensation.”

If no documentation is provided (i.e., employer letter and work log), the tax return will be returned requesting the missing documentation. This will result in delayed refunds.

Returns filed without the following documentation will be delayed resulting in refund denial/or disallowance of deductions:

       * Signatures
       * W-2s
       * Federal schedules - C, D, E, Form 2106, etc.
       * Copy of federal 1040 for IRA and alimony deductions
       * Copy of the relevant City income tax return for “Other City tax credit”

In case a return is audited, refunds can be delayed depending on the taxpayer’s response time.


9. Does the City pay interest on refunds?


Yes. The current interest rate is established by the State of Michigan Department of Treasury. As in the case of delinquencies, this rate changes every six months.


10. What are the requirements for remitting monthly and/or quarterly withholding tax payments?


Monthly payments: Required where the amount withheld per month exceeds $100. Payment is due on or before the last day of the month following the period in which taxes were withheld.

Quarterly payments: Allowed where amount withheld does not exceed $100 per month. Payment is due on or before the last date of the month following the quarter in which taxes were withheld. Employers must file an Annual Reconciliation (DW-3) along with DW-2s at the end of each tax year.


11.    What type of income is not taxable?


Gifts, inheritances and bequests;

Pensions and annuities, including disability pensions (pre-retirement distributions are taxable);

Proceeds of insurance (except payments from a health and accident policy paid for by your employer);

Unemployment compensation, supplemental unemployment benefits (sub-pay), welfare relief payments;

Workmen’s compensation or similar payment for death, injury or illness arising out of and in the course of an employee’s job;

Interest on obligations of the United States, the states or subordinate units of government of the states;

Military pay for members of the Armed Forces of the United States and the National Guard; and Social Security income or benefits.

See instructions for more details.


 
12. I filed for a refund and I was denied. Why?


Refund may have been offset against prior delinquent assessment or may be barred by Statute of Limitations.  Claims for refunds must be made within four (4) years from the date the payment was made or from the date the tax return was due.  A 2008 tax return due on April 30, 2009 would not be entitled to a refund.

Example:
2008 and prior years are not eligible for refunds – barred by the Statute of Limitations.

2009 is eligible for refund if filed by April 30, 2014




13. Does the City of Detroit, Michigan have an Income Tax Appeal?


Yes. The following steps should be followed in your appeal:

CITY OF DETROIT INCOME TAX APPEAL PROCESS

A. Contact the City of Detroit Income Tax auditor who performed the audit for an explanation of his/her disposition of the case.

B. If the taxpayer is dissatisfied with the auditor's disposition, the taxpayer should appeal in writing to the audit supervisor outlining areas of disagreement and provide documentation to support his/her position.

Audit Supervisor
Finance Department - Income Tax
Coleman A. Young Municipal Center - Suite 1220
Detroit, MI 48226


C. If the taxpayer is dissatisfied with the audit supervisor's disposition, he/she must write to request a hearing with the Income Tax Manager or his/her designate disclosing all facts involved and additional sought.

Income Tax Manager
Finance Department - Income Tax
Coleman A. Young Municipal Center - Suite 1220
Detroit, MI 48226

D. The Income Tax Manager or his/her designate gives the aggrieved taxpayer an informal hearing and review of the case. This is in order to possibly "weed out" resolvable disputes or misunderstandings.

If no agreement can he reached, the appeal is referred to the City's Finance Director or his/her designate, and who is the charter-designated "Administrator" of the City's Income Tax. Hearings are scheduled between the taxpayer and the Finance Director or designate, and the Finance Director or designate makes the final ruling in such appeals for the City Finance Department.

If the taxpayer disagrees with the Income Tax administrator's ruling, he/she may file a written notice of appeal to the Secretary of the Income Tax Board of Review within thirty (30) days of the final ruling by the Finance Department.

The Board of Review grants taxpayers an appeal hearing. A majority of the three (3) Board of Review members may affirm, modify, or reverse the matter under appeal.

E. If a decision rendered by the City of Detroit's Income Tax Board of Review is disputed, the taxpayer may appeal to the Michigan Tax Tribunal within thirty-five (35) days from the date of the Board of Review's determination.

F. If a taxpayer continues to be aggrieved, he/she can bring action of the Michigan Tax Tribunal's decision in the Court of Appeals to obtain a judicial determination on the matter.


14. Does the City of Detroit, Michigan have a payment agreement?


Yes. The application below has to be completed and submitted to the City.

Partial Payment Agreements


Taxpayers that are unable to pay their entire debt owed to the City at one time may call the partial payment agreement telephone line at 313-224-9159 or send a written request to enter into a partial payment agreement.  To be considered for a partial payment agreement, the taxpayer must meet all of the following conditions:

A. All tax returns for all years must be filed with the City.

B. Ability to make a 20% deposit of total amount owed (certified check or money order only).  Required to start the paperwork.

C. You owe a minimum amount of $500.  Amounts owed lower than $500 must be paid in full.

D. Completion of the personal information form.


If the taxpayer meets the requirements as set forth above:

A. The City will send the taxpayer a statement of liability detailing outstanding amounts owed, as well as request any additional missing information.

B. The taxpayer will submit the 20% deposit.   It is not necessary for the taxpayer to call and request a partial payment agreement again.
    
C. Within 3-4 weeks after the deposit is submitted and all information is received, the City will send the taxpayer a completed Partial Payment Agreement.  

D. The partial payment agreement below must be signed by the taxpayer and returned to:

City of Detroit
Partial Payment Agreement
P.O. Box 33164
Detroit, MI  48232

Download partial payment agreement


15. What shall I do if I am not able to file by the due date of April 30?


Upon written request to the City of Detroit, made on or before the due date, the Administrator may extend the time for filing up to six (6) months.  Please click on the following link to obtain the appropriate Extension Form.

Please be reminded that an approved federal extension will not be accepted in place of the approved Detroit extension. Penalty or interest shall not be assessed if the return is filed and the final tax paid within the extended time and the estimated tax paid equals seventy (70) percent or more of the tax shown due on the taxpayer’s final return or 70% or more of the tax shown due on the taxpayer’s return for the preceding taxable year.




16. What happens if my return is referred to Audit?


Processing time will be increased subject to taxpayer submitting documentations for loses/credits claimed. 



17. I was a Detroit resident for part of the year and then moved to a suburb.  What type of tax form should I use to file my current income tax return?


If you were a Detroit resident and had filed City of Detroit, Michigan returns in previous year using Form D1040(R) and had lived in the city less than twelve (12) months, you should use Form D1040 (L) to file a Part-Year resident return.

The same applies to a taxpayer who lived in a Detroit suburb and filed non-resident return using Form D1040(NR) in previous tax period. The taxpayer lived less than twelve (12) months in the suburbs before moving back to Detroit. The taxpayer should use Form D1040(L) to file Part Year Resident return.

Taxpayer should submit proof of residency with the return.  Acceptable documents are:
Deed/Lease and copy of driver’s license, both front and back.



18. When shall I use a non-resident form, D1040 (NR)?


You should use Form D-1040(NR) if all the following apply to you:
•    You were not a City of Detroit, Michigan resident at the end of December 31;
•    You live outside the City of Detroit, Michigan;
•    All gross income or part of it is derived from the City


19. I am a registered and approved City of Detroit vendor. I supply both service and a product to two different City departments.  Do I have to obtain two clearances for the departments?


No.  What is required is only one approved clearance.  City of Detroit Income Tax Clearance is issued on a yearly basis and is good for only one (1) year.  You will have to renew it on or before thirty (30) days prior to expiration date on the clearance.  If the clearance is current, then make a copy of it and send it to other City department that requires income tax clearance.

We encourage you to use our online 
fillable Clearance Form.  Please complete the form, then print it and email it to: IncomeTaxClearance@detroitmi.gov. We will mail you an approved or denied certificate.


20. I want to know the status of my Income Tax Clearance Application. What shall I do?

Please email your inquiry to: IncomeTaxClearance@detroitmi.gov.