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Desktop: City of Detroit Resident Income Tax Return

City of Detroit Resident Income Tax Return forms included in TaxSlayer Pro:

  • Form 5118: Resident Income Tax Return
  • Form 5121: City of Detroit Withholding Tax Schedule (corollary to Schedule W filed with the MI-1040)
  • Form 5253: City of Detroit Withholding Tax Continuation Schedule (continuation of Form 5121, produced if there are city tax withholdings on more than eight W-2s or paid by more than three partnerships)
  • Form 5209: City Income Tax Return Application for Extension of Time to File (used if there is expected to be a balance due on the income tax return and additional time is needed for filing the return)
  • Form 5122: City Income Tax e-File Payment Voucher (aka CITY-V, payment voucher for taxes due after the return has been e-filed)
  • Form 5123: City Estimated Individual Income Tax Voucher (used for submitting estimated tax payments by mail)

Creating a City of Detroit Resident Income Tax Return

From the main menu of the Michigan Tax Return, select:

  • MI Miscellaneous Forms
  • MI City Taxes
  • City of Detroit

You will then be asked for the residency status of this return. Choose Resident. A resident is an individual who lived within the City of Detroit for the entire year.

Heading Information

Heading Information is where you ...

  • indicate that a return is amended; 
  • indicate that the Michigan Department of the Treasury can speak to the preparer about the return;
  • indicate that the taxpayer and/or spouse is disabled if the exemption for "Deaf, Disabled, or Blind" is not already indicated.

Note: TaxSlayer Pro does not support MFJ filers on the Michigan return changing to MFS on the City of Detroit Resident return.

Additions

Certain deductions allowed on the Federal return are not allowed on the City of Detroit Resident return. The deductible portion of self-employment tax and self-employment health insurance deduction, if present in the Federal return, are automatically included. Enter the total of any others under Other Additions. Other additions include, but aren't limited to, the following:

  • Losses from S Corporations included in AGI
  • Educator expenses
  • HSA or Archer MSA 
  • Penalty on early withdrawal of savings
  • Student loan interest
  • Tuition and fees
  • Repayment of supplemental unemployment benefits under the Trade Act of 1974
  • The portion of a loss which occurred prior to July 1, 1962
  • NOL carryover

Subtractions

Certain items included in Federal AGI may be subtracted from the Resident return. Verify each subtraction ensuring that only the portion included in AGI is subtracted. Some are automatically pulled from the Federal return:

  • Pension, annuity, and other retirement benefits (except for early distributions with a 1099-R Box 7 code of 1)
  • Taxable portion of Social Security benefits
  • Interest on US government obligations
  • State and local income tax refunds and homestead property tax credit refunds
  • Unemployment compensation

Renaissance Zone deduction (from Michigan Schedule 1)

Enter the total of any others under Other Subtractions. Other subtractions include, but aren't limited to:

  • Certain ordinary, necessary, and reasonable unreimbursed employee business expenses, limited to:
    • Travel, meals, and lodging while away from home;
    • Expenses incurred as an outside salesperson who works away from their employer’s place of business;
    • Transportation expenses;
    • Expenses under a reimbursement or other expense allowance arrangement with their employer, where the reimbursement or allowance has been included in total compensation reported.
  • Compensation for service in the US armed forces to the extent included in AGI
  • Income from recoveries related to federal itemized deductions from prior tax years
  • Net profits received from a financial institution or an insurance company
  • The portion of a gain which occurred prior to July 1, 1962 (see the return instructions for information on determining the amount to be excluded)
  • City net operating loss carryover
  • Income from an S Corporation to the extent include in AGI

Total Payments and Credits

Local tax withheld from W-2s will be automatically carried into this menu. (Note: TaxSlayer Pro assumes local tax payments on the Michigan withholding line are for Detroit unless another city is specified in the Locality box). Add additional payments and credits for:

  • City estimated payments, payments on extension, and prior year credit carryforward
  • City tax paid by partnerships
  • Credit for income taxes paid to another city, with a maximum credit equal to 1.2% of the income earned in the other city.

Amount to be applied to next year (if there is an overpayment)

Enter the amount of the overpayment you wish to carry forward to next year, if any.

Interest (if there is a balance due)

Interest is charged if tax is paid after the due date. The interest rate is 1 percent above the adjusted prime rate and is adjusted on January 1 and July 1 of each year. Interest is charged from the original due date of the return to the date the balance of the tax is paid. An interest and penalty calculator can be found here. To find the current interest rate, search the current year Revenue Administrative Bulletins for "Interest Rates" here or call 517-636-5829.

Penalty (if there is a balance due)

Penalty is owed if tax is paid after the due date. Penalty accrues monthly at one percent of the tax due, and increases by an additional one percent per month, or fraction thereof (e.g., the penalty on $500 tax due is $30 if the tax is unpaid for six months).

Underpaid Estimate Penalty and Interest (if there is a balance due)

This section does not need to be completed if any of the following are true:

  • The individual was not required to file the preceding year
  • The individual had no tax liability the preceding year
  • The total tax due after withholdings and credits is $100 or less
  • Estimated payments were received in four equal, timely installments and were at least 70% of the current or preceding year tax.

An individual may owe penalty and interest for underpayment, late payment, or failure to make estimated tax payments. You can calculate the underpayment penalty and interest here if you wish, or you can let the Michigan DOT do the calculations and send a bill. For individuals whose income was received unevenly through the year, annualizing the income for the purposes of the interest and penalty calculation may be beneficial. The Michigan DOT won't do this in their calculations, so you'll need to complete this form if you wish to use the annualization of income method.

Form 5123 - City Estimates

Use this menu to prepare and print four City Estimated Individual Income Tax Vouchers for the upcoming year.

Form 5209 - City Extension

An extension request is only required if there is a balance due on the city return. It shouldn't be filed if the bottom line is a refund. Additionally, to be approved for an extension, both of the following must be true:

  • At least 70% of the prior or current year tax liability, whichever is less, must have been paid during the year through withholdings and estimated payments, and
  • The tax liability is paid in full by the original due date of the return.

If making a payment with the extension request, enter the amount, then print the request and mail it to the address on the form.

Disclaimer

While TaxSlayer Pro strives to make the information and links contained on this page as timely and accurate as possible, TaxSlayer Pro makes no promise or guarantee about the timeliness, accuracy or completeness of the contents of this page. The information contained on this page is a guide for creating a City of Detroit Resident income tax return and is not intended to be tax advice. The user is also encouraged to review the underlying state resources and publications.