Matt Helms

Detroit Free Press

With tax season here, Detroiters and suburbanites who work in the city will be able to file their city income taxes electronically for the first time because the state is now handling collection for the city.

“This is your opportunity to stop dealing with paper,” Carol O'Cleireacain, the city’s deputy mayor for economic policy, planning and strategy, said Friday. “It’s not required yet, but the whole system is geared to work better and quicker if you use electronic filing.”

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Electronic filing for state and federal returns has been available for years.

The move to have the state Treasury Department collect Detroit’s income taxes is expected to boost compliance with tax laws and provide much quicker refunds in a city that sometimes took months or years to get money back to taxpayers.

To prepare, the city and state have set up extra help for taxpayers to make it through the first year of the new system:

A call center dedicated to the transition is available at 517-636-5829, 8 a.m. to 4:45 p.m. weekdays.

The website www.michigan.gov/citytax has detailed information on how to file, including links to free or low-cost electronic filing services.

State workers will have a kiosk available on the first floor of the Coleman A. Young Municipal Center downtown to assist filers.

The Accounting Aid Society, which provides free tax filing assistance to low- and middle-income households at multiple locations around the city, also will have an office on the first floor of the municipal center for the first time this year. Volunteer assistance will be available 9 a.m.-4 p.m. on Mondays, Wednesdays and Fridays through April 18.

This year, the deadline for state and federal taxes is Monday, April 18, not the usual April 15, because of Washington, D.C.’s celebration of the Emancipation Day holiday on April 15. For years, the Detroit income tax deadline was April 30, but this year and going forward, it will be the same day as the state and federal deadline, O'Cleireacain said.

Taxpayers who end up owing income tax to the city will not be able to pay electronically or with cash, O'Cleireacain said. That will require writing a check or money order payable to "State of Michigan-City Tax" and mailed to the state.

O'Cleireacain said businesses that pay a 2% city corporate tax will be able to file electronically starting in 2017.

Detroit residents pay 2.4% income tax; nonresidents who work in the city pay 1.2%. The income tax is Detroit’s largest revenue source, bringing in about $250 million of its $1-billion annual budget, and the state takeover of tax collection is expected to get more people to pay their taxes, suburbanites and city residents alike.

In addition to suburbanites who don’t pay the city income tax, the city estimates there are 80,000-100,000 residents who don’t pay, in part because so many Detroiters — nearly two-thirds — work in the suburbs for companies that aren’t required by law to withhold Detroit income taxes.

Detroit Mayor Mike Duggan and mayors from 21 other Michigan cities that collect income taxes have been working with state lawmakers on legislation that would require suburban companies to withhold taxes on employees who work in cities with income taxes.

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Contact Matt Helms: mhelms@freepress.com or on Twitter @matthelms