Detroit city income tax for the self-employed in 2026
Detroit taxes the business profit of its residents as income, and the Michigan Treasury, not the city, collects it.
Detroit City of Detroit income tax (administered by Michigan Treasury), 2026
$2,160
Total with federal and Michigan tax: $24,780
| Local rate applied to net profit | 2.4% |
| Self-employment tax | $12,717 |
| Federal income tax | $6,599 |
| Michigan income tax | $3,304 |
Computed by Radif Partners from the Detroit finance department, read on October 15, 2026 · How we calculate
Detroit residents pay a city income tax of 2.4% on all their income in 2026, net profit from self-employment included, and nonresidents pay 1.2% on income earned in Detroit. Each personal exemption takes $600 off the taxable amount. The tax is administered by the Michigan Department of Treasury rather than the city, so freelancers deal with the same agency for both returns. On $75,000 of profit, a single Detroit resident owes about $1,786 to the city after one exemption, on top of Michigan's flat 4.25 %, which stays unchanged for 2026. Corporations pay a separate Detroit corporate income tax, so a business taxed as a corporation files that version instead. Detroit is one of 24 Michigan cities with an income tax: Grand Rapids charges 1.5% to residents, and about twenty smaller cities, from Lansing to Flint, apply the rates of the Uniform City Income Tax Ordinance.
The Michigan Treasury's 2026 withholding guide for the city sets the rates in one line: 2.4% for residents, multiply by 0.024, and 1.2% for nonresidents (Michigan Treasury, Detroit income tax 2026). For an employee the employer withholds it. A self-employed resident has no employer, so the tax on Schedule C profit is settled with the annual city return.
Local tax on business profit
Detroit City of Detroit income tax (administered by Michigan Treasury)
$1,920
| Rate | 2.4% |
What the 2.4% reaches
Residence settles almost everything. A Detroit resident is taxed on all income, including business profit from clients in the suburbs or out of state. A nonresident is taxed at half the resident rate, and only on income earned in Detroit, which for a freelancer means the share of profit from work done inside the city. Each personal exemption is worth $600 of income, so it lowers the tax by $14.40, a small amount next to the $1,800 that 2.4% of $75,000 produces.
The total bill shows how the city layer compares with the others. On $75,000 of profit, a single filer pays $10,597 of federal self-employment tax, $4,898 of federal income tax and $2,712 of Michigan income tax, before the Detroit tax is added.
The state rate and the cost of an LLC
Michigan's individual rate remains 4.25 % for the 2026 tax year: the automatic cut that follows strong state revenue was not triggered (Michigan Treasury, 2026 rate). The state personal exemption, on the other hand, grows to $5,900 per person for 2026, nearly ten times the city's, and the calculator above subtracts it before applying the state rate. The two exemptions are separate: claiming one on the state return does not change the $600 amount on the Detroit return. Forming a Michigan LLC costs $50 (LARA articles of organization), and its annual statement $25, due each February 15. A single-member LLC pays the city tax exactly like a sole proprietor, since its profit is the owner's.
Other Michigan cities with an income tax
Grand Rapids taxes residents at 1.5% and nonresidents at half that, on income that includes business net profits (City of Grand Rapids income tax). The same Grand Rapids page lists the other cities and their rates. A long group of cities applies the rates of the Uniform City Income Tax Ordinance: Albion, Battle Creek, Benton Harbor, Big Rapids, East Lansing, Flint, Grayling, Hamtramck, Hudson, Ionia, Jackson, Lansing, Lapeer, Muskegon, Muskegon Heights, Pontiac, Port Huron, Portland, Springfield, Walker. Their per-exemption amounts differ, from $600 in most of them to more in a few. Saginaw also taxes income, though its current rate could not be confirmed on an official page.
A freelancer who lives in one of these cities and works in another files in both. The Michigan page covers the state rules, and the local business taxes guide compares Detroit with cities in Ohio, Pennsylvania and Missouri.