Albion local tax guide
Who pays Albion's local tax
If your home is inside Albion's city limits, the 1% resident rate applies to all of your wages, including a job in Marshall, Battle Creek, or Jackson. If you live elsewhere and work in Albion, at the college or a local plant, you owe 0.5% on wages for days worked in the city. When a resident's work city also taxes income, as Jackson and Battle Creek do, Albion credits that tax up to its own 0.5% nonresident rate, which covers both cities' 0.5% nonresident tax in full.
How Albion's city tax works
Albion has levied an income tax since 1972 and runs it through City Hall rather than Michigan Treasury. Its rates are the default under Michigan's uniform city income tax ordinance, so the nonresident rate is exactly half the resident rate.
With only about 8,300 residents, Albion is the smallest taxing city on our Michigan list, and a large share of its tax comes from people who commute in. Residents subtract a personal exemption for each person on the city return; our estimate does not, so actual tax runs slightly below the numbers here.
Albion paycheck math at $75,000
A single filer earning $75,000 pays $7,670 in federal income tax and $2,937 in Michigan income tax. FICA adds $4,650 for Social Security and $1,088 for Medicare. An Albion resident pays $750 more to the city and takes home $57,905, or $4,825 a month.
A nonresident who works at Albion College pays $375 and keeps $58,280. A worker untouched by any city tax keeps $58,655. At $40,000, typical of many hourly jobs in town, the resident tax is $400 and take-home pay is $32,471.
Albion between Battle Creek and Jackson
Albion sits on Interstate 94 between two other taxing cities with the same rates: Battle Creek to the west and Jackson to the east. Marshall, the county seat just to the west, has no income tax.
Because all three taxing cities use 1% and 0.5%, an Albion resident who works in Jackson pays $375 to Jackson and $375 to Albion at $75,000, the same $750 total as working at home in Albion. For bigger-city comparisons, Grand Rapids charges 1.5% and Detroit 2.4%.
Tips for Albion paychecks
Working in Marshall? Withhold for Albion anyway
A Marshall employer has no reason to withhold Albion tax. Ask whether it can, or make estimated payments so the resident tax is not all due at filing.
Faculty and staff living outside town
College employees who live outside Albion owe the city only for days worked in it. Remote-work days spent outside the city are not taxable for nonresidents.
Check the township line
Albion Township and Sheridan Township surround parts of the city and do not levy an income tax. Confirm your address before claiming residency on a withholding certificate.