Michigan is home to 24 cities that levy a local income tax. The Michigan Uniform City Income Tax Ordinance (Act 284 of 1964) sets a standardised framework that every taxing city must follow: the same tax base definition, the same resident vs. non-resident distinction, and a two-to-one ratio between resident and non-resident rates. This uniformity is a significant advantage over Ohio's municipal system, where each of over 600 cities sets its own rules and rate structure.
The key rates divide into three tiers: Detroit at the top (2.4%/1.2%), Highland Park (2%/1%), Grand Rapids and Saginaw (1.5%/0.75%), and 20 cities at the base level (1%/0.5%). Michigan's state income tax is a flat 4.25% — so a Detroit resident pays 4.25% + 2.4% = 6.65% combined before federal tax.
Unlike Ohio, where employers may not withhold for your home city if they're based in a different city, Michigan employers within a taxing city must withhold city income tax for all employees who work within that city, and must also withhold for resident employees who live in that city regardless of work location.
Every Michigan city income tax follows the 2:1 resident-to-non-resident rate ratio required by Act 284. Non-residents pay tax only on income earned within city limits; residents pay on all compensation regardless of where the work is performed.
| City | Resident Rate | Non-Resident Rate | Notes |
|---|---|---|---|
| Detroit | 2.4% | 1.2% | Largest city; files via Michigan Treasury (Form 5118/5119/5120) |
| Grand Rapids | 1.5% | 0.75% | Second-largest taxing city |
| Saginaw | 1.5% | 0.75% | |
| Albion | 1.0% | 0.5% | |
| Battle Creek | 1.0% | 0.5% | |
| Benton Harbor | 1.0% | 0.5% | |
| Big Rapids | 1.0% | 0.5% | |
| East Lansing | 1.0% | 0.5% | Home to Michigan State University — many faculty and staff affected |
| Flint | 1.0% | 0.5% | |
| Grayling | 1.0% | 0.5% | |
| Hamtramck | 1.0% | 0.5% | Enclave city within Detroit city limits |
| Highland Park | 2.0% | 1.0% | Enclave city within Detroit city limits; higher rate by local ordinance |
| Hudson | 1.0% | 0.5% | |
| Ionia | 1.0% | 0.5% | |
| Jackson | 1.0% | 0.5% | |
| Lansing | 1.0% | 0.5% | State capital |
| Lapeer | 1.0% | 0.5% | |
| Muskegon | 1.0% | 0.5% | |
| Muskegon Heights | 1.0% | 0.5% | |
| Pontiac | 1.0% | 0.5% | |
| Port Huron | 1.0% | 0.5% | |
| Portland | 1.0% | 0.5% | |
| Springfield | 1.0% | 0.5% | |
| Walker | 1.0% | 0.5% | Suburb of Grand Rapids |
Note on Highland Park: Highland Park is an independent city completely surrounded by Detroit. Its 2%/1% rate is higher than most 1%/0.5% cities but lower than Detroit's 2.4%/1.2%. Workers commuting into Highland Park from the suburbs pay 1% as non-residents.
The resident vs. non-resident distinction is the most important concept in Michigan city income tax. It determines both the rate you pay and how much of your income is taxable.
If you live in a Michigan city with income tax, you are a resident taxpayer. You pay the resident rate on all of your compensation, regardless of where the work is performed. A Detroit resident who works in Dearborn (which has no city income tax) still owes 2.4% to Detroit on all wages.
If you work in a Michigan taxing city but live elsewhere, you owe city income tax as a non-resident only on compensation earned for work physically performed within city limits. You pay the non-resident rate (half the resident rate). A suburban commuter into Detroit pays 1.2% only on wages for days worked inside Detroit city limits.
If you moved into or out of a taxing city during the year, you are a part-year resident. For the months you were a resident, you pay the resident rate on all income. For the months you were a non-resident but worked in the city, you pay the non-resident rate on work-location income. Most cities have a single return that handles part-year residency allocation.
For residents, Act 284 taxes compensation, net business profits, rental income, dividends, interest and capital gains on the same basis as federal tax (nonresidents are taxed only on income from work or business in the city). Pensions, annuities and retirement benefits are not subject to the tax. A Detroit retiree living on pension income typically owes no city income tax on it, but investment income such as dividends and capital gains is taxable to city residents.
Detroit's city income tax is administered jointly by the City of Detroit and the Michigan Department of Treasury. Unlike all other Michigan cities, Detroit returns are filed through the Michigan Treasury e-file system — not a separate city portal.
April 15 — the same as Michigan state and federal returns. Extensions are available, but extension to file is not an extension to pay — estimated taxes must be paid by April 15.
Employers physically located in Detroit must withhold city income tax from the paychecks of Detroit residents and of employees who work in Detroit. Non-Detroit employers who have Detroit resident employees are not required to withhold Detroit tax, but some do voluntarily. Detroit resident employees whose employers don't withhold are responsible for making quarterly estimated payments (due April 15, June 15, September 15, and January 15).
Detroit uses a physical presence standard for non-residents. If you live in the suburbs but work for a Detroit employer 100% remotely from home, you owe no Detroit city income tax as a non-resident — only income physically earned within Detroit city limits is taxable to non-residents. Days you physically report to a Detroit office are subject to the 1.2% non-resident rate.
For Detroit residents working remotely, all compensation is taxable at 2.4% regardless of where the work is performed.
For all Michigan cities other than Detroit, residents file a separate city income tax return directly with the city's income tax administration office. There is no unified state portal for non-Detroit city returns.
The City of Grand Rapids administers its own income tax at a 1.5%/0.75% rate. Returns are filed on City of Grand Rapids Form GR-1040 (residents) or GR-1040NR (non-residents). The city's income tax office is at Grand Rapids City Hall. E-filing is available through the city's online portal. Deadline: April 30 (one day after federal — slightly different from most cities).
Lansing's income tax is administered by the City of Lansing Income Tax Administration. Form L-1040 for residents, L-1040NR for non-residents. April 30 deadline. Lansing is notable as the state capital — a large proportion of residents are state employees who may work in Lansing but live in surrounding Ingham County municipalities.
The City of Flint levies the standard 1%/0.5% rate. Flint experienced significant population decline since the 1970s, reducing the city's income tax base significantly.
East Lansing (home to Michigan State University) levies 1%/0.5%. A significant number of Michigan State employees live in Lansing (1% city) and commute to East Lansing — they pay 0.5% non-resident to East Lansing. East Lansing residents who work in Lansing pay 0.5% to Lansing as non-residents. Under Act 284 (MCL 141.665), a resident gets a credit against the home city's tax for tax paid to another city on income earned there, capped at the home city's nonresident rate.
Each of the 24 cities has its own income tax office. The Michigan Department of Treasury maintains a directory of all city income tax administrators at michigan.gov/treasury under "Local Governments." If you're unsure which city applies, your employer's payroll department typically handles withholding correctly.
Michigan's state income tax is a flat 4.25% on taxable income for 2026. This flat structure makes combined burden calculations straightforward.
| Residence | State Rate | City Rate | Combined | Rate × $80,000 (before exemptions) |
|---|---|---|---|---|
| Detroit | 4.25% | 2.40% | 6.65% | $5,320 combined state + city |
| Grand Rapids / Saginaw | 4.25% | 1.50% | 5.75% | $4,600 |
| 20 taxing cities (1%) | 4.25% | 1.00% | 5.25% | $4,200 |
| Non-taxing Michigan city | 4.25% | 0% | 4.25% | $3,400 |
For context: a Detroit resident paying 6.65% combined state + city is actually higher than neighbouring Ohio, where Columbus residents pay Ohio's 2026 rate of 2.75% on income above $26,050 (first $26,050 at 0%, per Ohio House Bill 96) + 2.5% city = up to 5.25% combined at the margin. Detroit's combined rate is higher than Columbus's top combined rate; both remain cheaper than New York City (up to 14.8% combined); comparable to Indiana (2.95% flat state rate, plus county income tax rather than city tax).
Michigan vs. Ohio decision for commuters: Workers who can choose to live either in suburban Detroit (Michigan) or in the Toledo, Ohio area often cite the income tax difference as a factor. A Toledo resident pays Ohio's state tax (0% on the first $26,050, then 2.75% in 2026) plus Toledo's 2.5% city income tax (per the City of Toledo's Division of Taxation); only someone living outside any taxing municipality, such as an unincorporated area, avoids a home-city tax, and working inside a taxing city can still create a liability. A suburban Detroit resident in Dearborn or Troy pays 4.25% state and no city tax on residence; the two arrangements are not directly comparable because Michigan and Ohio deductions, exemptions and credits differ.
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