Detroit local tax guide
Who pays Detroit's local tax
Detroit residents owe the 2.4% rate on all of their wages, including pay earned in suburbs such as Southfield or Dearborn that have no city income tax. Nonresidents owe 1.2% only on pay for work physically done inside Detroit, so days worked from a home office in Royal Oak or Novi are not taxable to the city. If you live in Detroit and pay income tax to another Michigan city, Detroit credits that tax up to what a nonresident would owe Detroit on the same pay. Your home address on December 31 does not settle it; part-year residents split the year.
How Detroit's income tax works
Detroit, a city of about 639,000 people in Wayne County, levies its tax under Michigan's City Income Tax Act. Most taxing cities in the state are held to 1% for residents and 0.5% for nonresidents, but the act carves out a higher ceiling for a city of more than 600,000 people, and Detroit is the only one that qualifies. That is why its 2.4% / 1.2% rates sit alone at the top of the state table.
The same statute ties a slice of Detroit's resident and nonresident rates to the police budget while the city's Public Lighting Authority bonds are outstanding, and it lowers the legal ceiling once those bonds are paid off. For 2026, the rates in our calculator are the ones employers withhold today.
The tax applies to wages, salaries, and other earned income. Detroit's return lets you subtract a personal exemption for yourself and each dependent; our estimate applies the rate to full salary, so your actual bill will run slightly lower than the figures here.
Worked example: $75,000 in Detroit
A single filer earning $75,000 pays $7,670 in federal income tax, $2,937 to Michigan, $4,650 in Social Security, and $1,088 in Medicare. Living and working in Detroit adds $1,800 of city tax, leaving take-home pay of $56,855.
Live in a suburb with no city tax and commute downtown, and the city takes $900 instead, for take-home pay of $57,755. With no city tax at all, the same paycheck nets $58,655, so living in Detroit costs $1,800 a year at this salary and commuting in costs $900.
The gap widens with pay. At $100,000 a Detroit resident pays $2,400 to the city and keeps $72,781, while a nonresident commuter pays $1,200 and keeps $73,981. At $150,000 the resident bill reaches $3,600. Compare other salaries on the Detroit take-home pay calculator.
Withholding and filing: Detroit runs through Michigan Treasury
Detroit does not run its own income tax office for individual returns. The Michigan Department of Treasury has administered the tax on the city's behalf since 2015, and Flint is moving to the same arrangement starting with tax year 2026. As a result, Detroit returns are filed alongside your MI-1040 in most tax software and are due on the same April deadline as the state return.
Residents file Form 5118, nonresidents file Form 5119, and people who moved in or out during the year file Form 5120 as part-year residents. You report each employer's Detroit withholding on Form 5121, the withholding schedule. For your employer, the certificate is the DW-4 (Treasury Form 5527), where you state whether you live in Detroit and what share of your work happens inside the city.
Michigan's reciprocity agreements with Ohio, Indiana, Illinois, Kentucky, Minnesota, and Wisconsin cover state tax only. A Toledo resident who works at a Detroit plant still owes Detroit's 1.2% nonresident tax.
How Detroit compares with other Michigan cities
Detroit's resident rate is higher than every other Michigan city on our list. Highland Park, the small city surrounded by Detroit, is next at 2%, which costs a $75,000 resident $1,500. Grand Rapids and Saginaw charge 1.5% ($1,125), and Lansing, Flint, Pontiac, and Hamtramck charge 1% ($750). Ann Arbor, Kalamazoo, and Bay City have no city income tax.
At the state level Michigan ranks 34th of 51 for take-home pay at $75,000, so a Detroit resident carries both a below-average state result and the state's steepest city rate.
Tips for Detroit paychecks
Working outside the city? Check your Detroit withholding
A suburban employer is not always set up to withhold Detroit tax for residents. If your pay stub shows no Detroit line, ask payroll to add it or make estimated payments so the full 2.4% does not land at once in April.
Log your remote days as a nonresident
Commuters owe 1.2% only for days worked inside Detroit. Keep a calendar of home-office days and update your DW-4 percentage, then claim the allocation on Form 5119 if too much was withheld.
File the city return with your state return
Because Treasury administers Detroit's tax, most tax software can e-file Form 5118 or 5119 with your MI-1040. Doing both at once keeps the April deadline from slipping.
Update the DW-4 when you move
Moving into Detroit from a suburb doubles your city rate. Give your employer a new DW-4 promptly so the higher resident rate is withheld from the first paycheck after the move.