Drake Tax - MI: Prorated Wages
Article #: 10483
Last Updated: December 05, 2024
Note If you are preparing a return for a Michigan city that uses the Common Form for municipal tax returns (see Drake Tax - MI - Michigan Cities), you cannot use the local wage box 18 because of local tax laws. Common Form instructions do not refer to box 18 of Form W-2. Accordingly, for these city returns, the software does not use box 18 information. For an example of local requirements, see the Lansing common forms instructions.
City Residents
For Detroit (DT), and Hudson (HU), the amount entered on screen W2, box 18 is directed by your entry in box 20. Box 20 on the W2 screen is used for city information. For city residents, enter the two letter city code in the first two spaces of this field.
Example 1: DT
Non-residents
For nonresidents earning income in a city, enter the two letter city code followed by the number of days worked in the city (3 digits), followed by a space, then the total number of days worked everywhere on that W-2.
Example 2: DT065 260(This indicates someone who only worked 25% of the year, or 65 out of a possible 260 in the city of Detroit.)
City Sub-Pay
On the federal W2 screen, box 20, enter the city code and SP to indicate Sub-Pay.
Example 3: DTSP would indicate that the wages on the W2 are Detroit Sub-Pay, not subject to tax.
Excludable Wages
If wages are 100% excludable for the city then enter the two letter city code followed by three zeros in the locality field or do not enter the city code on the W2.
Example 4: DT000