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State and Local Tax

Detroit, Michigan Withholding Tax to Be Paid Monthly in 2024

· 5 minute read

· 5 minute read

by Peter G. Pupke

The Michigan Department of Treasury has announced that effective January 1, 2024, employers will be required to file and pay their City of Detroit withholding tax monthly. State law requires that a withholding employer in any city where the Michigan Department of Treasury (Treasury) administers taxes must file a return and pay the tax withheld for each calendar month by the end of the 15th day of the following month. Treasury administers city of Detroit income, withholding and corporate income taxes. (News & Events Digest: August 2023, Mich. Dept. Treas., 08/31/2023.)

Monthly withholding payments required.

Due to this requirement, City of Detroit employers will be required to submit their monthly payments to Treasury electronically beginning in 2024. The option to file and pay quarterly will no longer be available. Treasury is working to implement an electronic payment system that will accept debit and credit cards or Automated Clearing House (ACH) or Electronic Fund Transfer (EFT) payments.

Debit and credit card payments will have a service fee, while ACH or EFT payments will not. Taxpayers interested in using a fee-free EFT payment method must submit a City of Detroit Electronic Funds Transfer Debit Applications, Account Update (Form 5473), which will be available by December 31, 2023.

Annual withholding reconciliation.

State law requires employers to file an annual City of Detroit Income Withholding Reconciliation (Form 5321) before February 28 of the immediately following calendar year.

Updated forms.

City Withholding Tax forms and documents will be updated to reflect the new monthly filings. The forms will only be available online or through applicable software vendors. Paper forms and booklets will no longer be printed and mailed to employers.

 

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