JACKSON, MI – While many people continue to work from home, some who make up a portion of the city of Jackson’s tax base have a chance to relieve a bit of their tax burden.
Those who work for a Jackson company or business but don’t live in the city may be confused by a section of the city’s income tax form that calculates how many days they worked in the city to count toward the income tax.
“Working at home counts as a day in the city,” the J-1040 individual income tax form states on page 2. “Do not subtract out.”
But that isn’t a hard and fast rule, City Treasurer Martin Griffin said. Employers can notify their non-residents that remote workdays can, in fact, be separated from the city income tax. Some have already addressed it through tax withholding, he said. Taxpayers should submit a form or a signed letter from an employer that specifies how many days were worked outside of city limits.
The language isn’t unique to the 2020 form, Griffin said. A 2019 form available online uses the same language. All tax forms on the city’s website ask filers to identify how many days were actually worked in Jackson and calculate the percentage of days worked in the city, including the 2020 return.
The phrase won’t exist on next year’s tax form, Griffin said.
Jackson is one of 24 Michigan cities with a local income tax. Residents pay 1% to the city, while non-residents who work in Jackson pay .5%.
The remote work stipulation may not bother some workers. Enrolled Agent Sandie Overton, who runs Haire’s Income Tax Service in Vandercook Lake, said most of her non-resident clients who have encountered that form in Jackson or other cities with income taxes don’t bother with further itemization.
“There are several questions they have to answer and requirements that they have to meet,” Overton said. “They just basically say, ‘Forget it.’”
In the 2019 tax year, 11,430 non-residents filed returns, according to a Freedom of Information Act request from MLive/the Jackson Citizen Patriot. In 2018, that number was 12,577.
The Michigan Department of Treasury, which administers the city of Detroit’s income tax, advises that any work done outside of the city cannot be applied toward taxable income. In East Lansing, officials use a subsection the city’s website to describe how non-residents should file when working from home.
Jackson taxpayers have until June 1 to file and pay 2020 tax returns, after the city and federal government extended the tax filling deadline earlier this year.
City officials have not yet determined how remote work will impact the city’s tax revenue. Estimates will become public after the filing deadline, they said.
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