Benton Harbor local tax guide
Who pays Benton Harbor's local tax
Benton Harbor residents owe 1% on all wages, even when the job is in St. Joseph, Benton Township, or across the state line in Indiana. People who live elsewhere and work inside Benton Harbor owe 0.5% on wages for that work. Michigan's reciprocity agreement with Indiana spares Indiana residents Michigan's state income tax, but not Benton Harbor's city tax, so an Indiana commuter working in the city still owes the 0.5%.
A recent tax, approved by voters
Benton Harbor, a Berrien County city of about 9,100 on Lake Michigan's southeast shore, is the newest taxing city on our list apart from East Lansing. Because Michigan has required voter approval for new city income taxes since 1995, the tax went to the ballot: voters rejected it in 2013 and approved it in November 2017, and it took effect on January 1, 2018.
The city administers the tax itself at the default 1% / 0.5% rates from Michigan's uniform city ordinance. The return allows a personal exemption for each person claimed, which our estimate leaves out.
What $75,000 looks like in Benton Harbor
A single filer earning $75,000 pays $7,670 in federal income tax, $2,937 in Michigan income tax, $4,650 in Social Security, and $1,088 in Medicare. A Benton Harbor resident pays $750 more and takes home $57,905, or $4,825 a month.
A Michigan resident who lives outside the city and works in it pays $375 and keeps $58,280. A St. Joseph resident who also works in St. Joseph keeps $58,655, the no-city-tax figure.
Lower salaries feel the tax less in dollars. At $40,000, a resident pays $400 to the city and takes home $32,471.
How Benton Harbor compares across southwest Michigan
Benton Harbor is the only taxing city in Berrien County. Kalamazoo, about an hour east, has no city income tax, and the nearest taxing cities on our list are Battle Creek, which shares Benton Harbor's 1% / 0.5% rates, and Grand Rapids, which charges 1.5%, or $1,125 for a $75,000 resident.
Statewide, Detroit charges residents 2.4%. A Benton Harbor resident pays $1,050 less than a Detroit resident at $75,000.
Tips for Benton Harbor paychecks
Working in St. Joseph or Indiana? Withhold for the city
Employers outside Benton Harbor may not withhold its tax. Ask payroll to add it, or make estimated payments so the resident tax is not due all at once.
Indiana residents: two different forms
Use Michigan's MI-W4 to claim the reciprocity exemption from state withholding, and the city's withholding certificate to report that you are a Benton Harbor nonresident.
Confirm whether your address is in the city or the township
Benton Charter Township surrounds much of the city and shares the Benton Harbor mailing name. The township levies no income tax.