Chris Villaire, CFP®
Founder, Villaire Financial
Twenty-four Michigan cities charge their own income tax on top of the state's. Most take 1% of what residents earn and 0.5% of what commuters earn inside city limits. Four charge more: Detroit, Highland Park, Grand Rapids and Saginaw. If you live or work in one of the 24, you file a city return separate from your Michigan return.
The four cities with higher rates
Many people first hear about city income tax when a paycheck comes in lighter than expected, or when a job offer lands in a city they have never worked in. These four charge the most.
| City | Residents | Nonresidents who work there |
|---|---|---|
| Detroit | 2.4% | 1.2% |
| Highland Park | 2% | 1% |
| Grand Rapids | 1.5% | 0.75% |
| Saginaw | 1.5% | 0.75% |
The other 20 cities
The rest follow the uniform rates in Michigan's City Income Tax Act: 1% for residents and 0.5% for nonresidents. Albion, Battle Creek, Benton Harbor, Big Rapids, East Lansing, Flint, Grayling, Hamtramck, Hudson, Ionia, Jackson, Lansing, Lapeer, Muskegon, Muskegon Heights, Pontiac, Port Huron, Portland, Springfield and Walker. The state Treasury Department keeps the official list.
Each city sets its own rate by ordinance, so confirm yours on the city's website before you file. Walker and Muskegon, for example, both post 1% and 0.5% on their own pages: see Walker and Muskegon.
What this means in West Michigan
Around West Michigan, the taxing cities are Grand Rapids, Walker, Muskegon and Muskegon Heights. Ionia, Big Rapids and Portland, farther inland, charge it too. Kentwood, Wyoming, Grandville, Holland, Zeeland, Grand Haven, Ada, Rockford, East Grand Rapids and Kalamazoo are not on the list.
That creates a quirk worth knowing. Someone who lives in Wyoming and works downtown pays no city tax at home but owes Grand Rapids 0.75% on those downtown wages. Someone who lives in Grand Rapids and works in Wyoming pays 1.5% on everything they earn.
How residents and commuters are taxed
A resident owes the city tax on income no matter where it was earned. Grand Rapids, for example, taxes residents on wages, business profit, interest, dividends, rental income and capital gains, and leaves out things like Social Security, pensions and unemployment.
A nonresident owes tax only on income connected to the city, mainly pay for work done inside city limits. The nonresident rate is half the resident rate, which the state law sets as a ceiling.
If you live in one taxing city and work in another, you do not pay both in full. Michigan's City Income Tax Act gives residents a credit for tax paid to another city, capped at what a nonresident would owe on that income.
Who has to file, and when
Filing thresholds are low and they vary by city. Grand Rapids asks single filers with more than $600 of income, or married couples filing jointly with more than $1,200, to file. Returns are due April 30, though the city says the date can move if the IRS extends its deadline. Late filing and late payment in Grand Rapids cost 1% a month, up to 25% of the tax, plus interest.
The city return is its own form, filed with the city. Your federal and Michigan returns do not cover it. Detroit is the one exception to filing with the city: the state Treasury Department processes Detroit's returns.
What changed recently
Flint is next. Treasury says it will start processing Flint's individual, business and fiduciary returns on January 1, 2027, which affects tax year 2026 and later. If you live or work in Flint, expect your 2026 return to go through the state instead of the city. The Treasury city tax page has the details.
A 2023 law, Public Act 195, also streamlined how cities and the state administer the tax. It took effect in February 2024 and mostly affects employers and city tax offices, not a typical wage earner.
What it does to a job offer
Say your taxable wages are $85,000. A Grand Rapids resident pays about $1,275 a year in city tax. A Walker resident pays about $850. A Kentwood resident who works in Kentwood pays nothing, and one who commutes downtown pays about $637.50.
Those are estimates. The city taxes your income under its own rules, which can differ from the salary on an offer letter. But the gap is real, and it belongs in the comparison between two jobs or two apartments, right next to rent and commute time.
When I build a budget for someone who lives or works in one of these cities, the city tax gets its own line, the same as federal and state tax. If you live in Grand Rapids, I also prepare the city return along with your federal and Michigan returns. A W-2 return for a Grand Rapids resident starts at $200 for all three, and you can see your price on the tax preparation page. For the city's own rules in more detail, read the Grand Rapids city income tax guide.
Rates and rules last reviewed October 5, 2026. They change, so check your city's site before you file.
Frequently Asked Questions
Does every city in Michigan have an income tax?
No. Only 24 Michigan cities charge one. Kentwood, Wyoming, Holland, Grand Haven and Kalamazoo are not on the list, and neither are most suburbs of Grand Rapids. Everyone in Michigan pays the state's flat 4.25% income tax for 2026, but a city tax applies only if you live or work in one of the 24.
Which Michigan city has the highest income tax rate?
Detroit, at 2.4% for residents and 1.2% for nonresidents who work there. Highland Park is next at 2% and 1%, followed by Grand Rapids and Saginaw at 1.5% and 0.75%. The other 20 cities charge 1% for residents and 0.5% for nonresidents.
Do I owe city income tax if I work from home?
It depends on where your home is. If you live in a taxing city, you owe the resident rate on your income wherever you earn it. If you live outside the city and work from home, the city your employer is in generally taxes only the work you do inside its limits, so check with that city if your paycheck shows city withholding.
Disclosure: This article is for educational purposes only and does not constitute personalized investment, tax, or legal advice. Individual situations vary. Tax rates and deadlines change, so confirm current figures with your city before filing. Villaire Financial, LLC is a registered investment adviser. Schedule a free intro call if you'd like to talk through your specific situation.
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