Before you start

An SSN or ITIN
Form W-4 with your employer for federal withholding
Michigan Form MI-W4 for state withholding
Form DW-4 with your employer for Detroit city withholding, if you live or work in the city
Records of foreign income and foreign financial accounts

Step-by-step

1
Complete all three withholding forms on day one
Federal W-4, Michigan MI-W4, and the Detroit DW-4 if you live or work in the city. The third one is the one people forget, and forgetting it means a city tax bill in April rather than deductions across the year.
Via employerWho: YouFirst week of employment
2
Work out whether you are a Detroit resident or a Detroit non-resident
Residents pay the higher city rate on all income; non-residents who work in the city pay roughly half that on income earned within it. The distinction is where you live, not where your employer's head office is, and it changes the rate on every payslip.
OnlineWho: You
3
Determine your US tax residency
The substantial presence test counts weighted days across three years to decide whether the US taxes your worldwide income or only US-source income. Your visa category does not decide this.
OnlineWho: You
4
Check for an applicable tax treaty
The US has treaties with around 70 countries that can reduce or exempt tax on particular income. Michigan starts from federal figures, so a federal treaty position generally flows through to the state return. The city return follows its own rules — confirm the treatment rather than assuming it flows all the way down.
OnlineWho: You
5
File federal, Michigan and Detroit returns by 15 April
The tax year is the calendar year. Since 2015 the City of Detroit's individual income tax returns have been administered by the Michigan Department of Treasury, so the state and city filings run through one system rather than a separate city office.
OnlineWho: YouBy 15 April annually
6
If you own a home, claim the Principal Residence Exemption
Michigan's Principal Residence Exemption removes a portion of the school operating tax from an owner-occupied home, and it is claimed by filing an affidavit — it is not automatic on purchase. In Detroit, also check eligibility for the city's HOPE property tax exemption if your income is low.
OnlineWho: You
7
File an FBAR if foreign accounts exceed $10,000
Aggregate foreign account balances over $10,000 at any point in the year trigger a FinCEN filing, separate from your tax return and with its own penalties.
OnlineWho: You

Documents you’ll need

Form W-2 from each employer, issued by 31 January — check it shows Detroit withholding if applicable
Form 1099s for freelance, interest and investment income
Forms W-4, MI-W4 and DW-4 filed with your employer
Passport and travel history for the substantial presence day count
Foreign account statements for FBAR reporting

Things most newcomers don’t know

The city income tax follows the job, not just the address.

Living in Royal Oak or Ferndale and commuting into Detroit does not avoid the city tax — you pay the non-resident rate on income earned in the city, roughly half the resident rate. Very few US cities levy an income tax at all, so almost nobody arriving has modelled it, and salary comparisons against Chicago or Nashville quietly overstate Detroit take-home unless you subtract it.

Source: Michigan Department of Treasury — City of Detroit income tax

Check that your employer is actually withholding the city portion.

The DW-4 is the form that sets it up, and it is the one people skip. Employers based outside the city do not always withhold Detroit tax correctly for staff who work there. If it is not on your payslip, it is accruing as a bill you will meet in April rather than a deduction you never noticed.

Source: Michigan Department of Treasury

The Principal Residence Exemption is claimed, not granted.

Michigan exempts an owner-occupied principal residence from a portion of the school operating tax, but only if you file the affidavit. Buyers who assume it arrives with the deed pay more than they need to, and in a city with high effective property tax rates that is a meaningful amount.

Source: Michigan Department of Treasury — Principal Residence Exemption

Your visa does not determine your tax residency.

The substantial presence test — a weighted day count across three years — decides whether the US taxes your worldwide income. Someone on a temporary visa can be a US tax resident; someone on a long visa can fail the test. Do the count rather than assuming.

Source: IRS — substantial presence test

Common mistakes to avoid

Comparing a Detroit salary to another city's without subtracting the city income tax.
Assuming living outside the city avoids the city tax when you work inside it.
Never filing a DW-4 and discovering the city tax as an April bill.
Buying a home and not filing the Principal Residence Exemption affidavit.
Missing the FBAR because a home-country account did not feel 'foreign'.
Believing a filing extension also extends the payment deadline.

Some of this may be out of date. Spotted something inaccurate? Help us keep it right for the next newcomer.