Income Tax: Frequently Asked Questions
What is the tax rate?
The individual and partnership tax rate is 1% for residents and 0.5% for non residents. The corporate tax rate is 1%.
Who needs to file a City of Hamtramck income tax return (H1040R &H1040NR)?
Every resident or part year resident of Hamtramck who has taxable income in a tax year must file a return. Every non resident who has taxable income derived from working or from sources within the city limits must file a return.
The following examples may be used to assist you in determining if a return is required:
1 Filing as a single person if your income is $600 or more, you must file a return.
2 Married filing jointly if your income is $1200 or more you must file a return.
3 Filing single and you are 65 years or older and your income is $1200 or more you must file a return.
4 Married filing jointly and both you and your spouse are 65 or older and your income is $2400 or more you must file a return.
If you do not meet the above criteria but Hamtramck tax was withheld or you made estimated tax payments, you must file a Hamtramck return.
All corporations and partnerships should file tax returns regardless of net income or loss.
Do I have to file an extension with Hamtramck if my return will not be filed on time?
Yes. Requests or extensions are due on or before April 30th using the form approved by the Administrator for the City of Hamtramck Income Tax Department. The Administrator may extend the filing date for up to 6 months. If no tax is owed or you are claiming a refund, an extension is not needed. Extension forms can be obtained at the Income Tax Office or on our web site.
Do I have to make quarterly estimated payments?
You must make estimated tax payments throughout the year if you expect to owe $100 or more in Hamtramck taxes for individuals and partnerships. Corporations must filed quarterly estimates if their Hamtramck taxes are $250 or more.
The deadline for estimated payments is as follows:
1st Quarter - April 30th
2nd Quarter - June 30th
3rd Quarter - September 30th
4th Quarter - January 31st
Who needs to file a Schedule L?
A Schedule L is only used when the taxpayer was a part year resident of Hamtramck and worked in Hamtramck during the part of the year that he was a nonresident. Schedule L allows the taxpayer to be taxed at two different rates. As a nonresident, the only income that is taxable to Hamtramck is income derived from Hamtramck. Attach Schedule L to the Hamtramck Resident return following the instructions.
What is considered taxable income?
Taxable income includes, but is not limited to, the following:
Salaries; wages; commissions; fees; bonuses; vacation pay; profit sharing plans; sick pay (if reported on a W-2); net profit from an operation of a business, partnership, estate or trust regardless where earned; interest from bank accounts; credit unions, S & L; rental income; dividends and capital gains; gambling and lottery winnings.
What is considered non taxable income?
Non taxable income includes:
Gifts; inheritances; bequests; unemployment compensation; supplemental unemployment benefits; welfare payments; workers compensation; interest from U.S. obligations; treasury notes; obligations of the states or subordinate units of the government; compensation for service from the U.S. armed forces; proceeds from pensions and social security benefits, even if taxable under the Internal Revenue Code.
Who must withhold City of Hamtramck taxes?
All employers, who do business in the City of Hamtramck, are required to withhold Hamtramck income tax from residents and nonresidents alike. This applies even if the employer does not maintain a location in the City of Hamtramck.
All not for profit organizations, such as charitable, religious and governmental must withhold taxes from compensation paid to their employees.
How do I file and pay for my withholding?
Withholding payments are submitted monthly if the total monthly withholding exceeds $100.00, otherwise the payments are submitted quarterly. At the end of each taxable year you must file a form HW3, with the City of Hamtramck , and you must attach all W-2s.
When is the deadline for making my withholding payments?
Monthly - on the last day of the month after the reporting period
Quarterly - on the last day of the month following the quarters end.
Note: Please include proper identification with your withholding coupons to insure prompt and accurate credit to your account and to avoid delinquent tax reminder notes.
What types of federal schedules to I need to attach with my Hamtramck income tax returns?
Residents: We require all federal schedules whose income or losses are reflected on the Hamtramck income tax return
Non Residents: We require all federal schedules that are applicable to income or loss derived from Hamtramck, i.e. Federal Schedule C, D, E, etc.
How do I calculate credit for taxes paid to other cities?
Only residents are allowed to claim credit for income taxes paid to other municipalities.
The credit equals 0.5% of income derived from the other city after exemptions amounts are deducted. The credit cannot exceed more than 50% of the Hamtramck tax liability. Also, you must attach a copy of the other city's non-resident tax return to the H1040R return or credit will not be allowed.
How do I contact the Hamtramck Income Tax Department?
The following are contact numbers:
General or individual tax questions Jia Hang 870-0313
Withholding or estimate questions Joy Gargano 870-0314
Final Assessments, Audits, Bankruptcies, Business License Holds, or Income Tax
Court Complaints Penny Aniol 870-0311
You can also contact us by mail at:
City of Hamtramck
Income Tax Department
3401 Evaline Avenue
Hamtramck, MI 48212
or via email at: