MI HB4829

Employers located in Michigan with employees who are residents of cities with populations over 600,000 that impose city income tax must withhold taxes for those resident employees, even if the employer is not located in or doing business in that city.

Small employers are exempt from this withholding requirement if they paid $500,000 or less in total wages in the preceding calendar year and have fewer than 10 employees.

Allows cities imposing income tax to enter into agreements with the Michigan Department of Treasury to administer, enforce, and collect city income tax on the city's behalf, with the department retaining a portion of collected taxes to cover administrative costs.

When administering city income tax, the Department of Treasury must follow procedures under the Revenue Act (1941 PA 122, MCL 205.1-205.31), and those procedures take precedence in case of conflicts with city ordinances.

Establishes withholding tax rates: residents are taxed at the city's standard resident rate (up to 3%), while nonresidents are taxed at up to 50% of the resident rate applied only to the portion of compensation earned for work performed in the city (no withholding required if less than 25% of work is performed in the city).