topic I won a jackpot at a Detroit casino. Do I have to file a Detroit city tax return? in Get your taxes done using TurboTax

I won a jackpot at a Detroit casino. Do I have to file a Detroit city tax return?

spunky — Sat, 27 Feb 2021 18:15:38 GMT

I do not live in Detroit.

Re: I won a jackpot at a Detroit casino. Do I have to file a Detroit city tax return?

ToddL99 — Sat, 27 Feb 2021 22:20:25 GMT

No, you do not have to file a Detroit city tax return - gambling winnings are not subject to this particular tax.

From the City of Detroit tax website:

What type of income is subject to tax?

Residents: All salaries, wages, bonuses, commissions and other compensation, net profits from a business or profession, net rental income, capital gains less capital losses, dividends, interest, income from estates and trust and other income.
Non-residents: Salaries, wages, bonuses, commissions, or other compensation for services rendered for work done or services performed in Detroit; net rental income from real and tangible personal property located in Detroit; net profit from a business, profession or other activity as a result of work done, services rendered or activity conducted in Detroit; capital gains less capital losses from the sale of real or tangible personal property located in Detroit.

Re: I won a jackpot at a Detroit casino. Do I have to file a Detroit city tax return?

spunky — Sat, 27 Feb 2021 23:38:39 GMT

@ToddL99 - thanks. But the Turbo Tax software assumes I do, since I have a W2G that shows the income was "earned" in Detroit. I guess that is why I'm confused. It's considered income for Federal and State, and it's part of my AGI, so are you sure I don't have to file a non-resident return with the city since the WG2 shows it in the Local box?

Re: I won a jackpot at a Detroit casino. Do I have to file a Detroit city tax return?

ToddL99 — Sun, 28 Feb 2021 00:11:03 GMT

They may have reported this as income from Detroit and withheld Detroit city tax, but gambling winnings by non-residents are not subject to Detroit City tax.

(If they withheld Detroit city tax, you could voluntarily file a return to get a refund).

The casino doesn't know what your residency status is, so they will report all winnings as "Detroit income". As a non-resident, however, you are not subject to Detroit city tax on that type of income.

For non-residents, Detroit City tax only applies to salaries, wages, bonuses, commissions, or other compensation for services rendered for work done or services performed in Detroit; net rental income from real and tangible personal property located in Detroit; net profit from a business, profession or other activity as a result of work done, services rendered or activity conducted in Detroit; capital gains less capital losses from the sale of real or tangible personal property located in Detroit.

Re: I won a jackpot at a Detroit casino. Do I have to file a Detroit city tax return?

spunky — Sun, 28 Feb 2021 01:12:36 GMT

Why, then, does your software assume I have to file a Detroit return? When I get to the section about local returns, the Detroit box is already checked - I believe based on the information on the W2G. Do I just say, no, I don't need a return on the next section?

And is it possible that "net profit from...other activity as a result of...activity conducted in Detroit" includes gambling?

Sorry for all the questions - I just want to be sure. If I don't file and should have, I end up paying penalties and interest later.

Re: I won a jackpot at a Detroit casino. Do I have to file a Detroit city tax return?

JeffreyR77 — Tue, 02 Mar 2021 01:01:06 GMT

The software likely assumes because you have Detroit tax withheld.

However the information quoted by @ToddL99 comes from the Detroit tax website.

You are not subject to tax by Detroit on your gambling winnings.

You are subject to tax by the State of Michigan.

Michigan Taxes on Gambling Winnings

Re: I won a jackpot at a Detroit casino. Do I have to file a Detroit city tax return?

Ende18526 — Tue, 22 Feb 2022 13:30:04 GMT

as far as i know no you shouldn't