Registered to Neighborhoods · 4 min read
Service notes
- Detroit’s income tax rate has been 2.4 percent for residents and 1.2 percent for nonresidents since 2013.
- The Detroit personal exemption has been $600 since tax year 2005.
- From January 1, 2027, Detroit returns move to Michigan Treasury’s eServices platform, with free online filing and no in-person or phone payments.
Detroit is one of the Michigan cities that levies its own income tax, and it is one of the first numbers a newcomer should put in a budget. If you live in the city, it applies to you. If you live elsewhere but work in Detroit, it may apply to you too, at a lower rate. Here is how it works.
The rates
| Taxpayer | Rate since 2013 | Rate in 2012 |
|---|---|---|
| Resident individuals | 2.4% | 2.45% |
| Nonresident individuals | 1.2% | 1.225% |
| Corporations | 2.0% | 2.0% |
The City of Detroit’s income tax page states that the 2013 rates apply to that year and subsequent years unless otherwise notified. Nonresidents pay half the resident rate.
The personal exemption
Detroit allows a personal exemption, which the city reduced from $750 to $600 effective with tax year 2005. As a simple illustration, a resident with $50,000 of income and one exemption would owe about ($50,000 minus $600) x 2.4 percent, or $1,185.60. Your actual return may include other adjustments.
Who files with whom
Since the 2015 tax year, the Michigan Department of Treasury has processed City of Detroit individual income tax returns under a partnership with the city. That means Detroit returns are filed with the state, not at City Hall.
Deadlines
| What | Due |
|---|---|
| 2025 annual return | April 15, 2026 |
| Estimated payment, quarter 1 | April 15, 2026 |
| Estimated payment, quarter 2 | June 15, 2026 |
| Estimated payment, quarter 3 | September 15, 2026 |
| Estimated payment, quarter 4 | January 15, 2027 |
Check whether your employer withholds Detroit tax from your pay. If not, as is common for freelancers, plan for the quarterly estimated payments.
Big change in 2027
Beginning January 1, 2027, Treasury is moving City of Detroit individual income tax onto GenTax, the same system used for the Michigan individual income tax. Taxpayers will use Michigan Treasury eServices to file, pay and manage both state and Detroit accounts in one place. Treasury lists these changes:
- Online filing directly with Treasury is free, and people with Detroit, Flint and state obligations can file all three in the same place.
- Bank account payments are free; card and digital wallet payments carry fees.
- In-person and phone payments will no longer be accepted. Mail remains an option.
- Refunds will go by direct deposit by default, with paper checks on request.
- Extension requests will be standardized, and penalty and interest still run from the original due date.
- Treasury may coordinate state and city audits, using records from one to check the other.
Nonresidents who work partly outside Detroit
Commuters who work less than 100 percent of their time in Detroit allocate their wages on Schedule N of the nonresident return. The city requires supporting documents when you claim less than 100 percent: a letter from your employer on letterhead verifying the schedule, with the signer’s name, title and phone number, and a work log showing days worked inside and outside the city. Without them, the return is sent back and the refund is delayed.
There is a catch for remote work. The city’s income tax regulation says the mere fact that a nonresident employee takes work home does not permit allocation of pay. Treasury’s Detroit pages include a separate telecommuting section; read it if you work from home part of the week.
Tip: If you move into or out of Detroit during the year, your return has to reflect the date you became or stopped being a resident. Keep your lease or closing date handy, update your address with Treasury, and use the Detroit forms Treasury publishes for your situation.
Where to get help
Questions about a Detroit return now go to Michigan Treasury, which runs the filing system and publishes the forms for each year and taxpayer type. For property tax questions, the city’s Detroit Taxpayer Service Center is at Suite 130 of the Coleman A. Young Municipal Center, 2 Woodward Avenue. It is open in person Monday through Friday, 8 a.m. to 4:30 p.m., and answers online inquiries within two business days.
A commuter’s example
A nonresident who earns $50,000, all of it for work done in Detroit, and claims one $600 exemption would owe about ($50,000 minus $600) x 1.2 percent, or $592.80. If part of the work was done outside the city, the Schedule N allocation, with the employer letter and work log, reduces the Detroit share.
Fitting it into a budget
For a household earning the Detroit median income of $39,938, the city tax works out to roughly $944 a year before any other adjustments, using one $600 exemption. That is a little less than one month’s rent at the city’s median gross rent of $1,074. Add it to property taxes or rent, water and transit costs when comparing a Detroit address with one outside the city.
Homeowners should pair this with the property tax guide in Detroit Property Taxes for New Homeowners: Mills, the Principal Residence Exemption and HOPE; renters can start with Choosing a Detroit Neighborhood: The Free City Maps to Check Before You Rent or Buy.