Highland Park local tax guide
Who pays Highland Park's local tax
Residents owe 2% on all wages, including pay from jobs in Detroit or the suburbs. When a resident works in Detroit, Detroit withholds its 1.2% nonresident tax, and Highland Park credits it only up to the 1% a nonresident would owe Highland Park. That leaves $750 still due to Highland Park on a $75,000 salary. Nonresidents who work in Highland Park owe 1% on pay for work performed inside the city's boundaries, not on days spent working from home elsewhere.
Why Highland Park's rate is above the usual 1%
Highland Park is a city of about 10,800 people completely surrounded by Detroit, with Hamtramck a short distance to the east. It adopted its income tax in 1966. Most Michigan cities stay at the default 1% / 0.5% under the uniform city ordinance, but the City Income Tax Act lets certain cities charge more, and Highland Park uses that room to charge 2% / 1%.
The tax follows the same structure as other Michigan cities: residents pay on all earned income, nonresidents on income earned in the city, with a nonresident rate exactly half the resident rate. Highland Park administers it itself, so its forms and payments go to the city, not to Michigan Treasury.
Take-home pay at $75,000
A single filer at $75,000 pays $7,670 in federal tax, $2,937 to Michigan, $4,650 for Social Security, and $1,088 for Medicare. A Highland Park resident who works in the city also pays $1,500, for take-home pay of $57,155, or $4,763 a month.
With no city tax the same worker would keep $58,655, so the city costs a resident $1,500 a year. A nonresident commuter pays $750 and keeps $57,905. At $100,000 a resident pays $2,000 and takes home $73,181.
Detroit residents at $75,000 pay $1,800 to their city, so living in Highland Park rather than Detroit saves $300 a year when you work where you live. Next door in Hamtramck, the 1% resident rate costs $750, half of Highland Park's bill.
Withholding and filing
An employer inside Highland Park withholds the city's tax once you return a city withholding certificate showing your residence. Detroit employers generally withhold only Detroit tax, so a Highland Park resident working downtown should expect a balance on the city return unless payroll agrees to withhold Highland Park tax too.
Highland Park returns are filed with the city, separately from the MI-1040. Residents claim the credit for tax paid to Detroit or any other Michigan city on the resident return.
Comparing nearby taxing cities
In the Detroit area, the city you live in matters more than the county. Detroit at 2.4%, Highland Park at 2%, and Hamtramck at 1% all sit within a few miles of one another, while most surrounding suburbs levy no income tax. Elsewhere, Grand Rapids and Saginaw charge 1.5% and Lansing and Flint 1%.
Tips for Highland Park paychecks
Budget for the second half of your resident tax
If you work in Detroit, the Detroit tax withheld counts for only half of what Highland Park charges residents. Set aside the remaining $750 per $75,000 of wages or make estimated payments.
Turn in a city withholding certificate on day one
Without a certificate on file, an employer may withhold without exemptions or for the wrong city. Tell payroll you live in Highland Park so it can apply the right rate.
Count your days if you split time across cities
Nonresidents who work part of the week in Highland Park and part elsewhere owe Highland Park only for days in the city. A simple log supports the allocation on the nonresident return.