Withholding Tax Guide - City Of Grayling - Income Dax Division- 2005 Page 3
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33) nothing for the third city.
2) Subtract $173.04 in exemptions from
a monthly basis unless he notifies the City in
$220 to get $46.96 the amount subject
writing, 30 days in advance, that he wishes
to withholding:
In no case are you required to withhold
to return to the quarterly basis.
3) Multiply $46.96 by 1/2% to get the
for more than two cities, the city of residence
Form GR-941 and check or money order
Detroit withholding of .23 cents.
and the city of predominant employment.
(cash should not be mailed) are to be mailed
to Grayling City Hall, P.O. Box 549, Income
WITHHOLDING REQUIRED ON
In the following examples, the employer
Tax Dept., 1020 City Blvd., Grayling, MI
NONRESIDENTS
is assumed to have a location, or to be doing
49738.
business, in each of the cities mentioned.
The withholding rate is half of one per-
CORRECTION OF ERRORS
cent on nonresidents of Grayling who have
Example No. 1: A Grayling resident works
Grayling as their predominant place of
Corrections of over and under withhold-
at your out of town location, in a city that has
employment.
ing due to an employer’s error should be cor-
no income tax. His earnings are $550 per
rected as follows:
If an employer lives in a city which also
week, and he claims three exemptions. His
has an income tax you may be required to
withholding would be $3.76 per week.
1) If the error is discovered in the same
also withhold half of one percent for his city
quarter in which it was made, the
1) Allow $57.68 for each dependent.
of residence.
employer shall make the necessary
Three times $57.60 is $173.04.
adjustment on a subsequent pay. Only
2) Subtracting $173.04 from $550 leaves
Example No. 1: An employee resides in a
the corrected amount should be includ-
nontaxing city and works full time for you in
$376.96 as subject to withholding.
ed in the quarterly return to the city;
Grayling, has earnings of $550 per week,
3) Multiplying $376.96 by 1% gives $3.76.
2) If the error is discovered in a subse-
and claims three exemptions. His withhold-
quent quarter of the same calendar
Example No. 2: A Grayling resident per-
ings is .18 cents per week.
year, the employer shall make the nec-
forms 30% of his services for you in City A,
essary adjustment on a subsequent
60% in City B, and 10% in Grayling. All three
1) Multiplying $57.60 by three exemp-
pay and report it as an adjustment on
tions gives $173.04 total exemption.
cities have an income tax. The man’s earn-
the next quarterly return;
2) Subtracting $173.04 from $550 leaves
ings are $500 a week and he has three
3) If the error is discovered in the follow-
exemptions.
$376.96 subject for withholding.
ing calendar year, the employer shall
3) Multiplying $376.96 by 1/2% gives
notify the Income Tax Dept. of the error.
Grayling’s withholding on this employee
Grayling withholding of 1.88 cents.
is half of one percent on his salary of $550
If an error is discovered in the withholding
Example No. 2: A nonresident employee
after exemptions.
of a former employee, notify the Income Tax
lives in Detroit, performs 80% of his work in
Dept.
1) Subtract $173.04 (three exemptions
Grayling, earns $550 weekly, and claims
at$57.60 each) from $550 leaving
three exemptions. His withholding for
ANNUAL REPORTS
$376.96 as subject to withholding.
Grayling is .66 cents and if you do business
in Detroit will also be required to withhold .94
An annual report must be made, on
2) Multiply this by 1/2% to get the
cents for that city.
Federal Form W-2, giving the name,
Grayling withholding of 1.88.
address, social security number, gross earn-
City B’s withholding is computed on 60%
ings and Grayling tax withheld for each
1) Multiply $550 by 80%, which gives
of his salary and he is allowed his full exemp-
employee from whom the tax has been with-
$440 as the amount earned in
tions.
held. These must be submitted to this office,
Grayling.
1) Multiply $550 by 60% to get $330, the
2) Subtract $173.04 (three exemptions)
and a copy furnished to each employee, by
amount of compensation earned in City
from $440, which leaves $266.96 as
February 28th of each year.
B.
Employers wishing to purchase one of
the amount subject to withholding.
2) Subtract $173.04 in exemptions, leav-
the commercially available W-2 forms in
3) Multiply $266.96 by 1/2%. This gives
ing $156.96 as the amount subject to
order to combine the City and Federal
1.33 as withholding for Grayling.
withholding.
reporting in one operation are permitted to
Multiply $156.96 by 1/2% to get City B’s
To determine Detroit withholding:
do so, providing one copy is submitted to the
withholding of .78 cents.
City by the employer, and one by the
employee with his annual City of Grayling
1) Subtract $173.04 in exemptions from
City A collects no withholding from this
income tax return.
$550 and multiply the result ($376.96)
employee.
An annual reconciliation, Form GR-W-3,
by 1/2%. This gives 1.88 as with-
holding for Detroit.
must accompany the W-2 Forms when they
Example No. 3: A Grayling resident per-
are filed with the City.
forms 60% of his services for you in Grayling
REPORTING AND PAYING
Any employer who goes out of business
and 40% in Detroit. Both have an income
AMOUNTS WITHHELD
or permanently ceases to be an employer
tax. His earnings are $550 a week and he
must file W-2’s and GR-W-3 by the date his
has three exemptions.
The ordinance requires that withholding
final withholding payment is due.
payments be made to the City Treasurer by
To determine the Grayling withholding:
the last day of the month following the close
ANY FURTHER QUESTIONS
of each calendar quarter (by April 30, July
1) Subtract $173.04 ($57.60 for three
Questions and requests for forms
31, October 31 and January 31). Quarterly
exemptions) from $550 leaving
should be addressed to the Income Tax
payments are to reported in total only, on a
$376.96 subject to withholding.
Dept., P.O. Box 549, 1020 City Blvd.,
Form GR-941 which will be available from
2) Multiply $376.96 by 1/2% to get the
Grayling, Michigan 49738.
Grayling withholding of 1.88.
the City Income Tax Dept. Employers regis-
All returns and remittances are to be
tered with this office may download this off
To determine the Detroit withholding:
mailed to the Income Tax Dept., P.O. Box
our website each year.
549, 1020 City Blvd., Grayling, MI 49738.
Employers wishing to pay monthly may
1) Multiply the $550 salary by 40% to
Forms and instructions can also be
do so. However, when an employer elects to
determine the amount earned in
found and printed off our website at city-
Detroit, it is $220.
go on a monthly basis he must then stay on
under site directory then
income tax.
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