City of Detroit Nonresident Income Tax Return forms included in TaxSlayer Pro:
- Form 5119: Nonresident 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)
City of Detroit Income Tax Return form not included in TaxSlayer Pro
Form 5327: City of Detroit Income Apportionment Schedule (used with Form 5119 if there is income from more than one business to apportion between Resident and Nonresident.) This form can be downloaded from the Michigan Dept of Taxation here. Note that TaxSlayer Pro does not currently support this form, so if you have more than one business with income to apportion you will need to prepare the Nonresident return by hand.
Creating a City of Detroit Nonresident 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 Nonresident. A nonresident is an individual who lived outside the City of Detroit for the entire year.
Heading Information is where you ...
- indicate that a return is amended;
- indicate that the taxpayer and/or spouse is disabled if the exemption for "Deaf, Disabled, or Blind" is not already indicated.
The following income is subject to tax:
- Compensation received as an employee for work done or services performed in the City of Detroit.
- Net profits of an unincorporated business or profession based on business activity conducted in the City of Detroit, whether or not such business or profession is located in the City of Detroit.
- Net profits from rental of real or tangible personal property located in the City of Detroit or gains on a sale or exchange of real or tangible personal property located in the City of Detroit.
- Early distributions of pensions and annuities.
- Payments from a health and accident policy paid for by the employer, to the extent as provided by the Internal Revenue Code.
- Interest, dividends, and intangible income received as part of a business
The following income is not subject to tax:
- Gifts, inheritances and bequests.
- Pensions and annuities, including disability pensions (but not including early distributions.)
- Insurance proceeds (except as indicated above).
- Unemployment compensation, welfare relief payments, supplemental unemployment benefits (sub-pay).
- Worker’s compensation or similar payments for death, injury, or illness arising out of and in the course of an employee’s job.
- Interest, dividends, and other forms of intangible income (except when the amounts received are part of a business, in which case they are considered as business income taxable to nonresidents).
- Military pay for members of the US Armed Forces and the National Guard.
- Social Security income or benefits.
1. Wages, Salaries, Tips, etc.
W-2 information will be pulled from the Federal return. For each W-2, determine whether or not the wages were fully earned within the City of Detroit. If a W-2 was not fully earned within the City of Detroit, click the W-2 line, then select Edit (or double-click the W-2 line), then select 6. Wage Allocation Menu. Completing the allocation section requires knowing the number of days the individual was paid for, the number of vacation, holiday, and sick days included in the total, and the number of days actually worked in the city. The information you enter here will carry to Form 5121 Part 3 which feeds Form 5119 Line 9.
2. Business or farm income (or loss)
Net income from Federal Schedules C and F will be pulled from the Federal return. If any of the income is from activity in a qualified renaissance zone, it can be excluded by selecting 1. Net Profit or (loss) from Business > Adjust Business Income (+/-) and entering the amount as a negative number. If any of the income was earned outside of the City of Detroit, then you will need to complete the Business Income Apportionment section of Form 5119. Select 2. Apportionment percentage and enter the required information. Note that if both the business property factor and payroll factor are 100%, the business is presumptively located inside the City, irrespective of sales, and the final average percentage should be 100%.
3. Gain or loss from sale of tangible property
Select this line to enter gains and losses from the sale or exchange of real or tangible personal property located in the City of Detroit.
4. Rental real estate and royalties
Net income from Federal Schedule E will be pulled from the Federal return. If any of the income is from activity in a qualified renaissance zone, it can be excluded by selecting Adjust Rental Income (+/-) and entering the amount as a negative number.
5. Partnerships and trusts
Select this line to enter the individual's share of income or loss from a Detroit partnership. (Note that if the individual is a shareholder in a tax-option corporation that has elected to file as an S Corporation, they are not required to report a distribution, but they may not deduct their share of any loss sustained by the corporation.)
Subtractions from Income
Items that can be subtracted from income include, but aren't limited to, the following:
- 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.
- Individual retirement account contribution (for individuals with City of Detroit earned income, to the extent the income is taxable.)
- Alimony paid. The amount entered on the Federal return will pull to the Subtractions menu. This amount may need to be adjusted per this formula: (City of Detroit Total Income / Federal AGI ) x Alimony paid = Allowable alimony subtraction.
- Moving expenses incurred in connection with new employment in Detroit and that are deductible on the Federal return can be subtracted, but they may need to be adjusted per this formula: (Taxable income after the move / Total income after the move) x moving expenses = moving expenses that can be subtracted. (This subtraction is not generally available to nonmilitary.)
- Net profits received from a financial institution or 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)
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
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.
Attach City Power of Attorney
If Form 151, Authorized Representative Declaration (Power of Attorney), needs to be included with the e-filed return, attach a PDF copy here. A PDF-fillable copy can be found here. After filling it out, download it to your computer, then attach it here.
Remove City Power of Attorney
Select this menu item to remove the Power of Attorney attached in the preceding step.
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 Nonresident income tax return and is not intended to be tax advice. The user is also encouraged to review the underlying state resources and publications.