Detroit City Taxes

[MissMLB]

My daughter wasn't able to receive her 2021 W2 by mail because her W2 has the incorrect address.  Per the incorrect address City of Detroit taxes were withheld.  My daughter worked in the City of Romulus where there is no city tax, and she lives outside of Detroit and should not have had Detroit taxes withheld.  She received a W2c form to correct the address error.  What is it that she needs to do to have the City of Detroit taxes refunded to her since they should not be withheld from her earnings?

[DawnC · Accepted solution]

She needs to file a Michigan and Detroit tax return to get the taxes that were withheld back.   TurboTax state software for Michigan will prepare Michigan city returns for the cities listed here.   All Michigan city returns, except Detroit, must be printed and mailed, even if your Michigan return is e-filed.   She will be able to e-file everything since she will be filing a city of Detroit return and it can be e-filed.   

She can start a federal return, enter the corrected W-2c and when she goes through the state return, there will be no wages to Detroit, so the withholdings will be refunded to her on the city tax return.   TurboTax will walk you through this when you prepare the state return - but enter her W-2C on the federal portion.   

I got a W-2c from my employer. How do I handle this?

[MissMLB]

The questionable data comes about per your advice is after entering the State Income tax data, and going into the questions for the City of Detroit return is where it asks "do you live or work in the City of Detroit".  No.  She did not live or work in the City of Detroit.  Having entered the corrected W2 tax data went ok.  I was able to go into the tax document and omit the City of Detroit wages, but it still generated a Schedule W which is fine.  So, to offset any questions and rejections for the refund.  I included a Request for Refund and Abatement form 843, along with a statement signed by her explaining that in an error of her address there has been City of Detroit taxes withheld from her wages.  Is using form 843 Request for Refund and Abatement alright to use regarding the City of Detroit income taxes that were withheld due to an incorrect address/residency status?

[ErnieS0]

No. Form 843 is a federal form and does not apply to a Detroit City return.

Detroit says, "If your City of Detroit allocation is less than 100 percent, please obtain a letter from your employer" to verify the amounts on the tax form and keep a work log. You do not have to send those but keep a copy for your records in case you are asked to produce them.

See the note at the bottom of Schedule W,  Part 3: Wage Allocation for Nonresidents.

[horseshoes]

Just filed my 2022 taxes. The Detroit City Tax was included on the Michigan State tax return (on separate forms). I'm due a refund from Detroit. Will a check automatically arrive in the mail? 

I was due a refund for federal and entered my direct deposit info, I owed for Michigan and entered my direct withdrawal info, but nothing for Detroit. I' guessing the State of Michigan e-file systems extracts the overpayment information and will mail a check to me?

[TeresaM]

You can check the status of your Detroit City refund on Michigan's web site 

You will need the following to access your return status:

1. Primary filer's Social Security number.
2. Primary filer's last name.
3. Tax year.
4. Adjusted Gross Income (AGI) or wages on Detroit tax return.
5. Filing status appears on Detroit tax return.

[horseshoes]

Thanks Teresa.