Lansing and East Lansing both have a city income tax

Most Michigan cities don’t have a local income tax. But the Lansing area is an exception. Unusually, both Lansing and East Lansing have one. If you live in either city, you’ll generally pay 1% of your income to the city. If you live elsewhere but work in either city, you’ll pay 0.5% on what you earn there. You won’t be taxed past 1% total. If you live in one taxing city and work in another, the two split it. Retirement income, Social Security, and unemployment aren’t taxed. There’s also a small per-person exemption. So for many people the real bite is modest. Returns are due April 30, separate from your state and federal taxes. A couple of things are worth knowing. Lansing’s income tax is long-standing and works like most Michigan city taxes. East Lansing’s is newer. Voters approved it in 2018 and it took effect in 2019. The reason: Michigan State University sits on a huge amount of land the city can’t collect property tax on. The income tax is how East Lansing gets MSU’s many employees to chip in for city services. East Lansing also paired its income tax with a cut to city property taxes. The tax is currently set to expire after 2030 unless voters renew it. One wrinkle catches people. A “Lansing” or “East Lansing” mailing address doesn’t always sit inside the actual city limits. Only the real city line triggers the tax. Both cities publish boundary maps. So the home or job that pays it is a matter of which side of that line you land on, not what the envelope says.