Filing a Detroit CIT Annual Return

• Every employer that has a location in the City of Detroit, or is doing business in the City of Detroit, even if it has no location in the City of Detroit, is required to withhold income tax for its employees.
• An employer has a withholding obligation if it has employees who work remotely (telecommute) from a location in Detroit.
• If an employer, that does not otherwise have an obligation to withhold, voluntarily registers to withhold, the employer must withhold from all employees who are residents of Detroit.

Note: An employer is any individual partnership, association, corporation, non-profit organization, governmental body or unit or agency, or any other entity that employs one or more persons on a salary, bonus, wage, commission or other basis whether or not the employer is in a business.

All employers registered for city income tax withholding are required to file City of Detroit Income Tax Withholding Annual Reconciliation (Form 5321), each year, even if no tax is due. This is in addition to any monthly/quarterly returns.

Mail the completed Form 5321 to:

Michigan Department of Treasury
P.O. Box 30812
Lansing, MI 48909

To ensure proper application of the payment, please follow all instructions provided on the return.

Complete City Income Tax Withholding Monthly/Quarterly Return (Form 5323) if your company is making required withholding payments on behalf of your company’s employees on a monthly or quarterly basis and are making the payments manually by paper check.

• A return must be filed even if there is no tax liability for the period.
• An annual return is also required each year, even if no tax is due.

If submitting a payment after the due date, include the calculated penalty and interest in the payment amount. If penalty and interest is not included, you may receive a bill for any additional amount due. 

Monthly/quarterly returns cannot be amended. The annual tax return will reconcile the account.

Employer's errors of over or under withholding should be corrected as follows: 

If an error is discovered in the same period (month or quarter) in which it was made:

The employer shall make the necessary adjustment in a subsequent payment. Only the corrected amount should be included in the return to the city; and

• Pay any additional tax due; or 
• Make a written request for refund of an overpayment including a specific explanation of the error.

If an error is discovered in a subsequent period of the same calendar year:

The employer shall make the necessary adjustment on a subsequent payment and report it as an adjustment on the next return; and

• Pay any additional tax due; or 
• Make a written request for refund of an overpayment including a specific explanation of the error.

If an error is discovered in the following calendar year:

The employer shall notify the City Income Tax Division of the Michigan Department of Treasury of the error by filing an amended Form 5321 including corrected W-2 Forms (W-2C), if applicable; and

• Pay any additional tax due; or 
• Make a written request for refund of an overpayment including a specific explanation of the error

If an error has been discovered after the City of Detroit Income Tax Withholding Annual Reconciliation (Form 5321) has been filed:

The employee will reconcile their annual withholding with the submission of their City Individual Income Tax Return. Any overpayment will be refunded and any determined liability with be the responsibility of the employee. 

Note: Overpayments of withholding will not be credited toward tax due in future years.

There is no extension to file available for City of Detroit Income Tax Withholding Annual Reconciliation (Form 5321).