Detroit levies a city income tax under MCL 141.501 et seq.: 2.4% on residents, 1.2% on nonresident workers, plus a 2% corporate tax on net business income earned in the city.
Detroit is one of 22 Michigan cities authorized to levy a local income tax under the Uniform City Income Tax Act, MCL 141.501 et seq. Residents pay 2.4% on all earned and unearned income; nonresidents working in Detroit pay 1.2% on Detroit-sourced wages. Corporations and unincorporated businesses pay 2.0% on net income apportioned to Detroit using the standard three-factor formula. Withholding is required for employers with Detroit nexus. Returns are due April 30, administered by the Michigan Treasury since 2017 when the state took over collection. Pass-through entities and partnerships file Form D-1065. Estimated payments are required quarterly above thresholds.
Failure to withhold or remit triggers Treasury penalties of 5% per month up to 25%, interest, and personal liability for responsible officers. Late filing carries an additional $25 minimum penalty and interest at the federal short-term rate plus 1%.
See how Detroit's business tax classification rules stack up against other locations.
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