Detroit income tax: rates, filing, and remote work

The first question is where you live. A Detroit resident pays the city’s 2.4% income tax on taxable income, even when the work happens outside Detroit. A nonresident pays 1.2% on taxable income earned in Detroit. Those city taxes sit alongside Michigan and federal income tax.

Now for the part that causes the most confusion: Michigan Treasury processes Detroit’s income-tax returns, but a Detroit return is still separate from your Michigan state return. Tax software may let you send the federal, state, and Detroit returns during the same filing session. It may also let you e-file Detroit by itself. Either way, you are completing Detroit resident, nonresident, or part-year city forms rather than adding one line to the state return.

That state arrangement began with the 2015 tax year. Detroit is currently the city return Michigan Treasury processes, but it will not stay alone: Treasury is scheduled to begin processing Flint’s 2026 city returns on January 1, 2027. The practical point is to follow the instructions for your city and tax year instead of assuming every Michigan city uses the same filing office.

Remote work turns on both residency and where the work happened. A Detroit resident generally owes Detroit tax even while working from a home outside the city. For a nonresident, wages for days worked outside Detroit are not Detroit-source wages. If a nonresident splits time between Detroit and another location, Treasury says to allocate the wages on Form 5119 and complete the nonresident return’s work-allocation section. Keep a work log or employer letter in case Treasury asks how the days were counted.

If you live in Detroit and pay income tax to another city on the same income, the Detroit return may allow a credit. The instructions limit that credit, so it is not always a full dollar-for-dollar wash. Report both cities carefully rather than simply subtracting one bill from the other.

This is a map of the rules, not tax advice. Residency, business income, changing work locations, and credits can make a return more complicated. Use Treasury’s forms for the tax year you are filing or ask a qualified preparer about your facts.