Detroit City Tax Question

[ned4spd8874]

What is the name of your state (only U.S. law)? Michigan

I'm a little confused by something and I'm hoping someone can help me out here.

I work in Detroit, but I live out of the city. My company is actually world wide and my paychecks come from another office located in a different city.

I was doing my taxes using TurboTax and came across something that made me think. It had asked me if I worked in Detroit (in a list of a bunch of local cities). I clicked the Detroit button; then the next screen asked if I received income from Detroit sources. I clicked no because I don't receive income from my company in Detroit. Like I said, the address on my check is from a different city. Well, I got to the end and I didn't provide me a Detroit form to mail out.

After some confusion and fumbling around, I decided to go back and select yes to receiving income from Detroit sources. That did it.

But the question that's on my mind now is should I really be paying Detroit taxes then? True, I work in the city of Detroit. But my pay comes from another location.

Any help/clarification would be appreciated!

 

[anteater]

Without knowing the ins and outs of the Detroit tax, I feel confident that the determining factor is where you earn the wages, not where the paycheck comes from.

(If they cut paychecks in California, would you have to pay California income tax?)

 

[ned4spd8874]

Without knowing the ins and outs of the Detroit tax, I feel confident that the determining factor is where you earn the wages, not where the paycheck comes from.

(If they cut paychecks in California, would you have to pay California income tax?)

Yeah, I'm thinking it's just bad wording on TurboTax's part. Maybe I'm just hoping of some technicality...their taxes are crazy high!

 

[ned4spd8874]

I just realized something today. I never filled out a Detroit city W-4 form! How do they even know how much to take out without that form? Am I missing something? Wasn't I supposed to have been given one of those for legal reasons? Or do they just guess in lieu of a W-4????

 

[Perky]

Since you earn an income in the city, you are subject to city tax on that income. I think it's 1.5% as a nonresident. I believe you will also have to file with city. Here's a link for more info:

http://www.ci.detroit.mi.us/Departments/Finance/IncomeTaxDivision/tabid/91/Default.aspx

 

[ned4spd8874]

Since you earn an income in the city, you are subject to city tax on that income. I think it's 1.5% as a nonresident. I believe you will also have to file with city. Here's a link for more info:

Income Tax Division| City of Detroit | www.detroitmi.gov

Yeah, I've kinda let go of that hope that there was a technicallity.

But as my previous post says, I don't understand how they could even start to deduct my check without the W-4 form submitted by me. It's a legal form. I've never signed or submitted one since working out of this building.

 

[Perky]

2008 Tax Forms
.... from "Employer Withholding Instructions" link

If an employee fails or refuses to file Form DW-4 with the
employer, the employer is required to withhold tax at the
resident rate without benefit of exemptions.

If they haven't been deducting the tax, then you should question your employer. Perhaps they have a waiver.

If they have been deducting, then the quote above explains why.

In either case, you should talk to your employer about it.