City of Detroit Part-Year Resident Income Tax Return forms included in TaxSlayer Pro:
- Form 5120: Part-Year 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)
City of Detroit Part-Year Resident Income Tax Return form not included in TaxSlayer Pro
Form 5327: City of Detroit Income Apportionment Schedule (used with Form 5120 if the business activity occurred inside and outside of the City of Detroit while a nonresident). This form can be downloaded from the Michigan Dept of Taxation here, completed by hand, and the results entered in the appropriate place on Form 5120. (See the "Net Profit or (Loss)" line instructions below.)
Creating a City of Detroit Part-Year 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 Part-Year Resident. A part-year resident is an individual who lived within the City of Detroit for part of the year. After this, you will be prompted to enter the beginning and ending dates of residency for the taxpayer and, in a MFJ return, for the spouse.
Heading Information is where you ...
- indicate for MFJ filers that they wish to file their city returns MFS. Changing the status means that only the taxpayer's City of Detroit return will be created and e-filed. The spouse return will need to be created and paper filed separately;
- 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.
To edit the dates of residency entered at the beginning of the return, select this menu item and edit them as needed.
The following income is subject to tax:
- Net profits of an unincorporated business, profession, enterprise, undertaking or other activity.
- Dividends and interest.
- Capital gains less capital losses.
- Income from estates and trusts.
- Net profits from rental of real and tangible personal property.
- 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.
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 on obligations of the United States, the states or subordinate units of government of the states.
- Military pay for members of the US Armed Forces and the National Guard.
- Social Security income or benefits.
Note: Certain income amounts may not automatically pull from the Federal return due to uncertainty about their taxability. Verify each income category with the Federal return to ensure that all taxable income is included.
1. Wages, Salaries, Tips, etc.
W-2 information will be pulled from the Federal return. While a resident of the City of Detroit, all wage income is taxable, but while a nonresident only wage income earned inside the City of Detroit is taxable. 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 Edit (or double-click the W-2 line), then select 6. Wage Allocation Menu. Completing the allocation section requires knowing the total 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 5120 Line 10.
2. Taxable Interest
Taxable interest income from the Federal return will pull here and cannot be adjusted.
3. Ordinary Dividends
Ordinary dividend income from the Federal return should pull here. Verify the amount is correct and adjust as needed.
4. Alimony Received
Taxable alimony from the Federal return should pull here. Verify the amount is correct and adjust as needed.
5. Net profit or (loss)
Net income from Federal Schedules C and F will be pulled from the Federal return. If any needs to be apportioned to the period of nonresidency, click this line and enter that amount, however if the period of nonresidency includes income from both inside and outside of Detroit, complete Form 5327 first and enter Form 5327 Line 19 on Line 3. Nonresident Amount under this menu. If there are multiple businesses with net income that needs to be apportioned, complete Form 5327 for each business and enter the sum of all of their Line 19 amounts on Line 3. Nonresident Amount under this menu.
6. Gain or loss from sale of property
Residents should generally report all gains and losses in the Resident column. Nonresidents should report the gains and losses from the sale or exchange of real or tangible personal property located in the City of Detroit in Nonresident column. The portion of a gain which occurred prior to July 1, 1962 should be excluded (see the return instructions for information on determining the amount to be excluded).
7. Early Distribution of IRA
Residents only should report any early distribution from an Individual Retirement Account (IRA) received before age 59 1/2.
8. Early Distribution of pensions
Residents only should report any early distribution from a pension plan, annuity, or other retirement plan.
9. Income/loss from Rents or Royalties
Residents will enter the net profit or loss from royalties and rentals of real and tangible personal property (from Schedule E of the Federal return) received while a resident of the City of Detroit in the Resident column. Nonresidents will enter those amounts in the Nonresident column.
10. Income or loss from partnership
The individual's share of income or loss from a Detroit partnership while a Resident is entered in the Resident column, and the portion received while a Nonresident in the Nonresident column. (Note that if the taxpayer is a shareholder in a tax-option corporation that has elected to file as an S Corporation, the taxpayer is not required to report a distribution, but they may not deduct their share of any loss sustained by the corporation.)
11. Other Income
Residents only should report any income categorized as "Other Income" on the Federal return. Residents should also include any other City of Detroit income subject to tax that is not reported elsewhere on this return.
Subtractions From Income
Note: For the period a taxpayer was a resident, any expense listed may be subtracted in full. For the period a taxpayer was a nonresident, the subtraction is limited to the share of total income earned in the City of Detroit.
Items that can be subtracted from income include 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 and SEP account contributions. Contributions made while a nonresident may be subtracted only to the extent income was earned in the City of Detroit.
- Alimony paid. The amount entered on the Federal return will pull to the Subtractions menu. For nonresidents, this amount may need to be adjusted per this formula: (City of Detroit Total Income while a nonresident / 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.)
- 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)
Only Residents can subtract the Renaissance Zone deduction (from Michigan Schedule 1).
Some additional subtractions (enter the total in Other Subtractions):
- Net profits received from a financial institution or insurance company.
- City net operating loss carryover
Here is where you prorate the individual's or couple's exemption amount. The entire amount will initially be entered in the Resident column. Enter in the Nonresident column the amount prorated according to the number of months subject to the nonresident tax rate.
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 forward
- City tax paid by partnerships
- Credit for income taxes paid to another city, with a maximum credit of 1.2% of the income earned in the other city. The credit only applies for tax paid on income received while a resident.
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.
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 Part-Year 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.