Do I qualify for a Detroit nonresident tax allocation?
by TurboTax•54• Updated 1 month ago
If you worked remotely for a Detroit-based company, you may qualify for a city tax break. You must also:
- live in Detroit part of year,
- come in to Detroit to work, or
- be considered a nonresident of Detroit
Residents of Detroit will still be taxed on all income, even if they’re working from home and telecommuting for a company outside the city limits.
If a nonresident Detroit employee has a W-2 that shows city-based income tax withheld for periods when working remotely, the city permits those employees to exclude time spent working as a nonresident.
How do I exclude nonresident time in TurboTax?
TurboTax provides an option that allows you to divide days spent working in Detroit from days working outside the city.
Here’s how it’s done:
- Sign in to TurboTax and open your state return.
- Answer the questions until you get to the Which Cities Did You Live or Work In? screen, then select I need a Detroit City return and I file as a Detroit Nonresident, then select I don't need a Michigan return. Take me to my city return.
- On the Live or Work in Any of These Cities? screen, select Detroit and any other applicable cities. Then select Continue.
- On the Your Detroit Return screen, select I file as a Detroit Nonresident, then Continue.
- Continue to the Detroit Wages screen, select Edit next to your affected wages.
- On the Detroit Wage Adjustment screen, select Working Days Allocation as the Adjustment Type.
- On the Allocation of Detroit Wages screen, you can calculate your income taxable to Detroit based upon your days worked in Detroit versus total days worked. Select Continue.
- Enter an explanation (for example: working remote), then select Done.