City of Port Huron Income Tax: Filing, Withholding, and Penalties

The City of Port Huron income tax is a flat 1% on residents and 0.5% on nonresidents who work inside city limits. Individuals file on Form PH-1040 by April 30 each year, and the same return is used whether you live in the city or only work there. The Income Tax Division will also prepare your city return for free if you bring in your documents.

What You Owe

The rates are flat, with no brackets:

Residents: 1% of all taxable income, regardless of where it was earned.
Nonresidents: 0.5% of taxable income earned inside Port Huron city limits.
Corporations: 1% of net profits attributable to business activity inside the city.¹

A resident who works in another city or another state still owes the full 1% to Port Huron on those wages. A nonresident who works partly inside the city and partly outside uses Schedule A on Form PH-1040 to split the wages and tax only the portion earned in Port Huron.²

Who Has to File

You file as a Port Huron resident if you were domiciled in the city during the tax year. You file as a nonresident if you lived outside the city but earned wages or other income from work performed inside it.¹

If you moved into or out of the city during the year, you generally file as a part-year resident. There is one exception: if you lived outside the city for part of the year but had no income during that time, you file as a nonresident instead.²

Corporations with a location in Port Huron or any business activity in the city must file Form PH-1120. A corporation that operates both inside and outside the city calculates the share of net profits tied to the local activity.¹

What Is Taxed and What Is Not

Taxable income includes wages, salaries, commissions, bonuses, vacation pay, holiday pay, sick pay, net profits from a business or profession carried on in the city, and contract income reported on a 1099.¹

Several common sources of income are fully exempt:

Social Security, Railroad Retirement Act benefits, pensions, annuities, disability pensions, and qualified IRA distributions.
Welfare relief, unemployment benefits (including supplemental unemployment), and workers’ compensation.
Interest from United States, state, or local government bonds and obligations.
All pay for service in the U.S. armed forces, including Reserve and National Guard pay.
Amounts received for personal injuries, sickness, or disability to the extent excluded under the federal Internal Revenue Code.²

The retirement exemption is broad. Pensions, annuities, and qualified IRA distributions are not taxed by Port Huron even for residents.

How and When to File

Every individual filer, resident or nonresident, uses Form PH-1040. There is no separate nonresident form; you mark your status on the same return and use Schedule A if you need to allocate wages between inside and outside the city. Corporations use Form PH-1120.²

Before you start, gather your W-2s showing any Port Huron tax withheld, 1099s for contract or other non-wage income, and a copy of your federal return. The Social Security numbers on your city return must match what appears on your W-2s.³

Calendar-year individual returns are due April 30. Calendar-year corporate returns are also due April 30, which is the last day of the fourth month after the fiscal year ends.⁴

You can submit a completed return in several ways:

Email a scan or photo to incometax@porthuron.org.
Mail or hand-deliver it to City of Port Huron, Income Tax Department, 100 McMorran Blvd., Port Huron, MI 48060.
Use one of the two drop boxes at 100 McMorran Blvd., one in the south parking lot and one inside the building on the first floor near the Income Tax Department.³

If you cannot file by April 30, you may request up to a six-month extension. The extension only gives you more time to file the paperwork. You must still estimate what you owe and pay the full amount with the extension request; any unpaid balance after April 30 is charged penalty and interest.⁵

Quarterly Estimated Payments

Individuals must make quarterly estimated payments on Form PH-1040ES if their Port Huron tax liability will exceed withholding and credits by $100 or more for the year. This mostly affects self-employed people, independent contractors, and anyone with significant income that no employer withholds city tax on. You can skip estimates if your withholding and credits cover at least 70% of the tax shown on your current or prior year return.⁶

Corporations owe estimated payments whenever total city tax will exceed $250 for the year.

For calendar-year filers, the quarterly installments are due:

First quarter: the first business day after April 30.
Second quarter: June 30.
Third quarter: September 30.
Fourth quarter: January 31 of the following year.

You can also pay the full estimated amount with the first voucher instead of spreading it across four installments.⁶

What a Late Payment Costs

Any tax left unpaid after the due date is charged a penalty of 1% of the unpaid balance per month, up to a maximum of 25%. Interest runs separately at one-twelfth of an annual rate the State of Michigan sets twice a year based on the prime rate. The minimum combined penalty and interest charge is $2.00.⁷

These charges apply whether you filed late, filed on time but underpaid, or asked for an extension without paying the full balance by April 30.

Employer Withholding

An employer with a location in Port Huron or doing business in the city must withhold city tax from employee pay: 1% for employees who live in the city and 0.5% for nonresident employees whose primary place of work is in the city. No withholding is required on amounts paid to nonresidents for work performed outside Port Huron.¹

Pensions, annuities, workers’ compensation, and similar benefit payments are not subject to withholding, even for Port Huron residents.

Withheld taxes are remitted quarterly on Form PH-941, due April 30, July 31, October 31, and January 31. At year-end, employers file W-2s for each employee withheld from and reconcile total withholdings on Form PH-W3.¹

Separately, under Michigan Public Act 211 of 2003, any 1099-NEC issued to a payee with a Port Huron address must be filed with the city’s Income Tax Department by February 28. No transmittal form is required, and the city accepts substitute forms or electronic copies by email, CD, or USB drive.³

Free Help and Where to Reach the Department

The Income Tax Division will prepare your city return at no charge. Bring your W-2s, 1099s, and any relevant schedules. If you do not have those, bring your complete federal return; if you do not have the federal return either, download a transcript from irs.gov and bring or email that instead.³

The office is at 100 McMorran Blvd., Port Huron, MI 48060. Phone 810-984-9741. Email incometax@porthuron.org.³

1
City of Port Huron. City of Port Huron Income Tax Withholding Guide
2
City of Port Huron. 2024 Instructions for Form PH-1040 City of Port Huron Individual Income Tax Return
3
City of Port Huron. Income Tax
4
City of Port Huron. 2024 Instructions for Form PH-1120 City of Port Huron Corporation Return
5
City of Port Huron. Extension of Time to File a City Income Tax Return
6
City of Port Huron. 2025 Form PH-1040ES Declaration of Estimated Tax
7
City of Port Huron. 2023 Instructions for Form PH-1040 City of Port Huron Individual Income Tax Return