Income Tax Withholding
Any employer of one or more persons must withhold:
- Federal and state income taxes from wages paid to employees
- State income taxes from wages paid to employees
- City income tax (if applicable) To find out if a city levies a tax, contact that particular city tax assessor or city treasurer.
Each employee completes the following forms. Based on the certificate's information, a certain amount of taxes are withheld from the employee's wages.
- IRS Withholding Exemption Certificate (W-4)
- MI-W4 from the Michigan Department of Treasury
Federal Income Tax Withholding
You may be required to deposit the federal taxes collected. One must file quarterly returns with the IRS and file an annual reconcilement of the quarterly returns. If returns are neglected or filed improperly, penalties and excess payments may be levied. For more information about federal income tax withholding, check online at www.irs.gov.
State Income Tax Withholding
State filing requirements may vary based on the amount of state taxes withheld. An employer must file Form 518, an "Application for Registration" with the Michigan Department of Treasury if employees are hired. They will then notify the employer of filing deadlines and provide the needed forms. An annual return is also required. Michigan's withholding tax tables are available from the Michigan Department of Treasury online at www.michigan.gov/taxes.
City Income Tax Withholding
Contact the City Treasurer to determine if a city income tax is applicable for the new employees. If the City does have an income tax, the City Treasurer can provide the required registration forms and any information that is needed.