Ionia local tax guide
Who pays Ionia's local tax
Residents owe 1% on all wages. If an Ionia resident works in Grand Rapids or Lansing, that city withholds its nonresident tax and Ionia credits it, up to Ionia's own 0.5% nonresident rate; a Grand Rapids job withholds 0.75%, so the credit covers only part of it, while a Lansing job's 0.5% is credited in full. Either way the resident still owes Ionia the other half of its 1%. Nonresidents who work inside Ionia owe 0.5% on those wages.
How Ionia's income tax works
Ionia, a city of about 11,200, adopted its income tax in 1994, one of the last Michigan cities to do so before a 1995 change in state law began requiring voter approval for new city income taxes. It uses the uniform ordinance's default rates and runs the tax through City Hall.
The city return allows a personal exemption for each person claimed. Our estimates apply the rate to gross pay, so your real Ionia tax will be a little smaller than shown.
Ionia at $75,000
A single filer earning $75,000 owes $7,670 in federal tax, $2,937 to Michigan at 4.25% after the $5,900 personal exemption, $4,650 in Social Security, and $1,088 in Medicare. The Ionia resident tax adds $750, leaving $57,905 a year, or $4,825 a month.
A nonresident working in Ionia pays $375 and keeps $58,280, and a worker with no city tax keeps $58,655. At $100,000, an Ionia resident owes the city $1,000 and takes home $74,181.
Commuting from Ionia to bigger taxing cities
Ionia sits between two taxing cities. Grand Rapids, about 35 miles west, charges residents 1.5% and nonresidents 0.75%. Lansing, a similar distance east, charges 1% and 0.5%. Walker, on Grand Rapids' west side, also charges 1% and 0.5%.
For an Ionia resident working in Grand Rapids, the combined city bill is Grand Rapids' 0.75% plus the $375 left for Ionia at $75,000, more than living and working in Ionia alone. Working in Lansing instead keeps the total at $750. Portland, a smaller city in the same county, levies its own income tax as well.
Tips for Ionia paychecks
Expect an Ionia balance on a Grand Rapids job
Grand Rapids withholding does not settle your Ionia resident tax. Plan for about $375 per $75,000 of wages when you file, or make estimated payments.
Tell your work city where you live
Your work city's withholding form should show that you live in Ionia, so it withholds at the nonresident rate. Keep the W-2 to claim the credit on your Ionia return.
Confirm city limits
The townships around the city, including Ionia Township, levy no income tax. Check your address before your employer withholds the resident rate.