SAGINAW, MICHIGAN
WITHHOLDING TAX GUIDE
WHO MUST WITHHOLD
An employer who: has a location in the city; or is doing
business in the city even though the employer has no
location in the city; is required to withhold Saginaw income
tax.
An employer is any “individual, partnership, association,
corporation, nonprofit organization, governmental body or
unit or agency, or any other entity . . . that employs one or
more persons on a salary, bonus, wage, commission or
other basis, whether or not the employer is in a business.”
Example: A construction firm from Ohio is doing work in
Saginaw.
Even though it has no Saginaw business location, the firm is
required to withhold.
An employer who has locations both in and out of the city
must withhold from all employees working in the city, and
from all Saginaw residents working outside the city.
A nonprofit organization in the city is required to withhold
from its employees (even though it is not engaging in
business activity in the usual sense).
WITHHOLDING AS A CONVENIENCE TO
EMPLOYEE
Saginaw encourages employers who are not required to
withhold Saginaw income tax to register and withhold for the
convenience of their Saginaw resident employees.
Convenience withholders must comply with the registration
and filing requirements of the Saginaw Income Tax
Ordinance.
REGISTRATION
Every employer is required to withhold Saginaw income tax.
They must register by filing Form S-SS-4, Employer’s
Withholding Registration. Forms are available at
www.saginaw-mi.com.
Enter the following information on Form S-SS-4:
1) Federal Employer Identification Number (FEIN), trade
name of the employer;
2) The correct mailing address for forms and
correspondence;
3) Type of ownership and telephone number;
4) The approximate number of employees;
5) The date the employer started business and the date of
the first payroll subject to Saginaw income tax withholding;
6) Signature and title of the responsible person. (Print the
name of the individual signing the form under the signature.)
The employer’s account number for Saginaw is their FEIN.
An employer must immediately advise the city of a newly
assigned FEIN by filing a Notice of Change or
Discontinuance, Form S-6-IT.
Send the completed registration form to:
Saginaw Income Tax Office
1315 S Washington Ave
Saginaw, MI 48601
FROM WHOM TO WITHHOLD
Employers are required to withhold from the following
employees:
1) All residents of Saginaw whether or not they work inside
Saginaw; and
2) All nonresidents of Saginaw who have Saginaw as their
predominant place of employment (see below).
An employee is anyone from whom an employer withholds
either federal income tax or social security tax.
SW-4 FORMS REQUIRED
To determine each employee’s place of residence and
predominant place of employment an employer must have
each employee fill out an Employee Withholding Certificate,
Form SW-4. Only one Form SW-4 is required for each
employee, even though the employee may be subject to
withholding for two cities.
When properly filled out, Form SW-4 provides the
employee’s city of residence and the two cities or
communities in which the employee earns the greatest
percentage of compensation from the employer. Most
employees will only have one city of employment and will
circle 100% as the percentage of compensation earned in
that city. Form SW-4 is also the employee’s statement of the
number of dependency exemptions claimed. Employers
withholding for Saginaw may obtain SW-4 forms from the
city. The SW-4 form is also available on the Saginaw
website.
Do not mail SW-4 forms to the city; these are for the
employer’s use and must be retained in the employer’s files.
FROM WHAT COMPENSATION TO
WITHHOLD
The Saginaw Income Tax Ordinance requires that Saginaw
income tax be withheld from:
1) All compensation (salaries, wages, commissions,
severance pay, bonuses, etc.) of a Saginaw resident for
services rendered or work performed regardless of whether
such services or work are performed in or out of the city; and
2) All compensation of a nonresident for services rendered
or work performed in Saginaw where Saginaw is the
predominant place of employment.
Vacation, holiday, sick, severance and bonus pay to
nonresidents who perform part but not all of their work or
services in Saginaw are taxable in the same ratio as their
normal activities.
Example: A nonresident employee who is subject to
withholding on 60% of their earnings, because 60% of their
work is performed in Saginaw, is also subject to withholding
on 60% of their vacation, holiday, sick pay, severance pay,
bonus pay or wage payments during periods of sickness.
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PAYMENTS NOT SUBJECT TO
WITHHOLDING
Withholding does not apply to:
1) Wages paid domestic help;
2) Fees paid independent contractors who are not
employees;
3) Payment to a nonresident employee for work or services
rendered outside of Saginaw;
4) Qualified pensions and annuities, worker’s compensation
and similar benefits;
5) Amounts paid for sickness, personal injury or disability (so
called excludable sick pay) to the same extent that these
amounts are exempt from federal income tax, but the
employer must withhold from such payments if federal tax is
withheld;
6) Amounts paid to an employee as reimbursement for
expenses incurred in performing services.
An individual with income described in items 1, 2 and 3
above is not subject to withholding on such income. The
individual is nevertheless required to file an annual return
and report such income if the individual is a Saginaw
resident, or is a nonresident earning such income in
Saginaw.
INCOME TAX WITHHOLDING RATES
The Saginaw income tax rate for residents is 1.5% (multiply
by .015).
The Saginaw income tax rate for nonresidents is 0.75%
(multiply by .0075).
CALCULATING THE AMOUNT TO WITHHOLD
The Saginaw City Income Tax is a straight percentage on
compensation after an adjustment for personal and
dependency exemptions. Each exemption is valued at
$750.00 per year. For the various pay periods the exemption
translates to the amounts in the table below.
Weekly $14.42
Bi-weekly $28.84
Semi-monthly $31.25
Monthly $62.50
Per diem $ 2.05
Exemptions are allowed for the employee and spouse.
Additional exemptions are allowed if either the employee or
spouse is 65 years of age or older, or blind (this is different
from the federal rule). Individuals who may be claimed as an
exemption on the individual return of another may still have a
personal exemption for themselves (this is different from the
federal rule). Exemptions for dependents other than the ones
referred to above are governed by applicable federal rules.
The amounts in the preceding table are used to adjust gross
pay for payroll withholding. The adjustment is the number of
exemptions on Form SW-4 multiplied by the exemption
value. On a weekly payroll for a wage earner with three (3)
exemptions, the adjustment is 3 times $14.42, or $43.26.
EXAMPLE: Gross pay is $200.00 per week and the wage
earner lives in Saginaw and has 3 exemptions. The amount
taxed is $200.00 minus $43.26, or $156.74. Apply the 1.5%
resident rate (.015 times $156.74), and withhold $2.03 from
the employee for the week.
The above method is applicable to all City of Saginaw
withholding for regular payrolls. Withholding tax tables follow
these instructions.
For bonuses or other taxable earnings paid in addition to
regular payroll, do not adjust for exemptions. Withhold the
correct tax percentage from the entire bonus or other taxable
earnings amount.
COMPUTER PREPARATION OF PAYROLL
Since hardware and software used to compute income tax
withholding varies, it is impossible to give an actual program
with which to compute Saginaw withholding. The following is
a description of the most commonly used method to
compute income tax withholding.
1) Multiply gross earnings by the percent earned in Grand
Rapids for nonresidents or use gross earnings for residents.
2) Multiply number of exemptions by the appropriate
exemption value:
Weekly $14.42
Bi-Weekly $28.84
Semi-Monthly $31.25
Monthly $62.50
Per Diem $ 2.05
3) Subtract the result of Step 2 from the result of Step 1.
4) Multiply the result from Step 3 by:
a. 1.5% for residents; or
b. 0.75% for nonresidents.
RESIDENT – JOB IN OTHER CITY LEVYING A
TAX
When a resident works at a job in a city other than Saginaw
and the other city levies an income tax, the employer must
withhold separately for both Saginaw and the other city. The
rate of income tax to be withheld for Saginaw depends on
the tax rate of the other city. If the nonresident tax rate of the
other city is less than 0.75%, compute the Saginaw
withholding rate by subtracting the other city’s nonresident
tax rate from 1.5%. If the other city’s nonresident tax rate is
0.75% or higher, withhold Saginaw tax at the rate of 0.75%.
NONRESIDENT – JOB PARTLY IN SAGINAW
If a nonresident of Saginaw works less than 100% of the
time within the City of Saginaw for an employer, the amount
withheld should be based only on wages earned in Saginaw.
If gross pay is $200.00 and only 60% of the employee’s work
is in Saginaw, the gross pay for Saginaw tax purposes is
60% of $200.00 or $120.00. In this example, compute the
amount to be withheld for Saginaw as if the employee
earned $120.00 gross pay.
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NONRESIDENT – PREDOMINANT PLACE OF
EMPLOYMENT
Nonresidents of Saginaw are subject to withholding only if
Saginaw is their predominant place of employment.
The Ordinance defines predominant place of employment as
“that city imposing a tax under a uniform city income tax
ordinance other than the city of residence, in which the
employee estimates he will earn the greatest percentage of
his compensation from the employer, which percentage is
25% or more.”
Saginaw is a nonresident’s predominant place of
employment if:
1) The nonresident employee earns a greater percentage of
compensation in Saginaw than any other Michigan city with
an income tax, except the employee’s city of residence;
and
2) This greater percentage constitutes 25% or more of the
nonresident employee’s total compensation from the
employer.
An employee can have only one predominant place of
employment.
PAYING THE TAX WITHHELD
All employers are now required to use our withholding
website, www.municonnect.com/saginaw. If you need to
be assigned a PIN, please contact our office at
989.759.1655. The pre-printed forms available on this
website must be used whenever possible. If the preprinted
data is incorrect, mark through the errors and write in the
correct information. Always be sure the correct withholding
period is entered on the deposit form.
FORM S-501 - EMPLOYER’S MONTHLY
DEPOSIT
A monthly deposit is required for each month in which the
amount withheld exceeds $100.00. Employers who remit
monthly must use Form S-501, Employer’s Monthly Deposit,
for the first and second month of each calendar quarter.
Form S-501 is never used for the third month of a quarter.
Use Form S-941, Employer’s Quarterly Return of Income
Tax Withheld, for the third month of a quarter.
FORM S-941 - EMPLOYER’S QUARTERLY
RETURN
Every employer must file a Form S-941, Employer’s
Quarterly Return of Income Tax Withheld, for each calendar
quarter. Form S-941 must be filed even if no tax was
withheld during a quarter or when all tax withheld was
previously paid on Forms S-501 for the quarter.
Remit the remaining balance of Saginaw tax withheld for a
quarter with Form S-941.
SEND ALL DEPOSITS DIRECTLY TO:
Saginaw City Income Tax
1315 S Washington Ave
Saginaw, MI 48601
MAKE CHECKS PAYABLE TO:
Saginaw City Treasurer
DUE DATES
Each withholding deposit is due on the last day of the month
following the month in which the tax withheld exceeds $100.
Each quarterly return is due on the last day of the month
following the end of the quarter.
Example:
S-501 Monthly Deposit for January is due February 28 (or
29).
S-501 Monthly Deposit for February is due March 31.
S-941 Quarterly Return for 1
st calendar quarter is due April
30.
CORRECTION OF ERRORS
Employer’s errors of over or under withholding should be
corrected as follows:
1) If an error is discovered in the same quarter in which it
was made, the employer shall make the necessary
adjustment on a subsequent payment. Only the corrected
amount should be included in the quarterly return to the city;
2) If an error is discovered in a subsequent quarter of the
same calendar year, the employer shall make the necessary
adjustment on a subsequent payment and report it as an
adjustment on the next quarterly return;
3) If an error is discovered in the following calendar year, the
employer shall notify the Income Tax Department of the error
by filing an amended SW-3 including corrected W-2 forms
(W-2C), if applicable, and:
a) Pay any additional tax due; or
b) Make a written request for refund of an overpayment
including a specific explanation of the error.
ANNUAL REPORTS
An Employer’s Annual Reconciliation of Income Tax
Withheld, Form SW-3, is required to be filed by last day of
February of the following year. A W-2 form for each
employee subject to Saginaw income tax withholding must
be included with Form SW-3. Form SW-3 is the annual
withholding tax form and is also available on the City of
Saginaw withholding website.
A federal Form W-2 must be filed for each employee subject
to Saginaw income tax whether the tax was withheld or not.
The W-2 must provide the following information:
1) The name, address and federal identification number of
the withholding employer.
2) The name, home address and social security number of
the employee.
3) The total gross wages paid the employee for the year
even if the total wages did not have Saginaw tax
withheld.
4) The total Saginaw tax withheld for the year. The
amount of tax withheld must be clearly labeled as being
Saginaw income tax withheld, and the label must be in
the appropriate box on the Wage and Tax Statement,
Form W-2. Failure to properly and clearly label the Saginaw
tax withheld makes the W-2 form unacceptable. Improperly
labeled W-2 forms do not satisfy the withholding tax
reporting requirements of the Saginaw Income Tax
Ordinance, and will not be accepted as the basis for a refund
when attached to an individual’s Saginaw income tax return.
An employer may submit magnetic media (3.25 inch floppy
disk or CDROM) in lieu of paper W-2s.An employer may also
e-file the W-2. Information and specifications about filing via
magnetic media is available on the City’s website.
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SALE OR DISCONTINUANCE OF BUSINESS
An employer who sells or discontinues business must file a
Notice of Change or Discontinuance Form S-6-IT. This form
is available on the City’s website.
An employer who goes out of business or permanently
ceases to be an employer must file W-2s and a SW-3 by the
date the final withholding payment is due.
ANY FURTHER QUESTIONS
The City Council adopted Rules and Regulations that
supplement the Income Tax Ordinance. Please refer to the
Michigan City Income Tax Act of 1964, available as a link on
the City of Saginaw website. In case of a variance between
the Michigan City Income Tax Act and the Saginaw Income
Tax Ordinance, the Act prevails.
Mail all returns and remittances to:
Saginaw Income Tax Office
1315 S Washington Ave
Saginaw, Michigan 48601
Questions and requests for forms should be sent to the
address above. Requests may also be made via telephone.
The Income Tax Department telephone number is (989) 759-
1650.
INTERNET ACCESS TO FORMS AND
INSTRUCTIONS
Income tax forms, instructions and additional information are
available in the Income Tax Department section of the City
of Saginaw website.
The website address is www.saginaw-mi.com.
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