MACPA representatives joined with major Detroit employers at a meeting on March 8, 2006 to discuss the City’s new non-resident income tax return regulations. Detroit Finance Department officials clarified implementation and compliance questions, and are expected to update information on the City’s web site soon.

As previously reported by the MACPA, the City of Detroit is requiring non-resident taxpayers (filing Detroit Non-Resident tax return Form D-1040 (NR)) who allocate less than 100 percent of their income to services performed in the City to provide documentation. Without the appropriate documentation, tax returns will be sent back to the employee.

Specifically, a non-resident taxpayer must substantiate lines 1 and 2 of the Schedule N allocation by providing documentation/work log and a letter from the employer stating that he or she is required to perform job-duties outside of the City.

The MACPA has obtained a sample verification letter to assist in compliance with this new regulation.

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