Grand Rapids Tax: Income, Property, and Payment Deadlines

Grand Rapids charges a city income tax on top of state and federal income tax, plus property tax billed twice a year. Residents pay 1.5% on all income; non-residents pay 0.75% on income earned from work physically performed inside the city. Annual income tax returns are due April 30. Property tax bills go out in July and December, with the two halves due July 31 and February 14. The rules for what counts as taxable, what qualifies for exemption, and when payments are due differ enough from federal and state that treating them casually is how people end up with penalties.

Who Owes City Income Tax

The Grand Rapids City Income Tax applies to individuals and corporations with an income connection to the city, at rates in effect since July 1, 2010.¹

Residents pay 1.5% on all earned income, regardless of where the work is performed.
Non-residents pay 0.75% on wages, salaries, and net profits earned from work physically performed within Grand Rapids.
Corporations pay 1.5% on net profits attributable to business activity in the city.

If you live in Grand Rapids, every dollar of taxable income is subject to city tax even when you commute to a job in another city. If you live outside the city but work inside it, only the income earned on days you physically work in Grand Rapids is taxable. Remote workers who never set foot in the city generally owe nothing, since the tax follows the location of the work rather than the location of the employer.

Corporations operating both inside and outside the city apportion their profits using a three-factor formula based on property, payroll, and sales within the city relative to company totals.²

Income the City Does Not Tax

Grand Rapids exempts a long list of income types, and the list is broader than most people expect. Retirement income is the biggest one: Social Security, pensions, annuities, and IRA distributions taken after age 59½ are all exempt, even when they are taxable on your federal return.³ IRA distributions taken before age 59½ can still be subject to city tax.⁴

Other excluded categories:

Military pay, including Reserve and National Guard compensation.
Unemployment compensation, supplemental unemployment benefits, welfare relief, and workers’ compensation.
Gifts, inheritances, bequests, life insurance proceeds, and distributions of principal from estates and trusts.
Interest from U.S. obligations such as savings bonds and Treasury notes, and interest from state and local government obligations.
City, state, and federal tax refunds.

Personal Exemptions and Allowable Deductions

Each personal and dependency exemption is worth $600, reducing taxable income dollar for dollar.⁴ You must file a city return whenever taxable income exceeds your total exemptions, which for a single filer with no dependents means a filing threshold of just $600.

The city does not allow a standard deduction, and you cannot deduct charitable contributions or medical expenses. The allowable deductions are limited to:

IRA contributions, to the extent allowed under the Internal Revenue Code.
Alimony paid, but only where it qualifies federally, meaning divorce agreements finalized before 2019.
Income earned within a designated Renaissance Zone.

Non-residents who claim any of these must prorate them based on the ratio of Grand Rapids income to total income.³

Withholding and Quarterly Estimated Payments

Employers operating within Grand Rapids must withhold city income tax from wages at 1.5% for city residents and 0.75% for non-residents.¹ Employees complete Form GRW-4 to set their exemptions. At year-end, employers file a W-3 Annual Employer Reconciliation.

If you have income that is not subject to withholding, such as self-employment earnings, rental income, or investment gains, and you expect to owe more than $100 in city tax, you need to make quarterly estimated payments.³ The threshold for corporations and partnerships is $250. Payments are due April 30, June 30, September 30, and January 31 of the following year. Individuals use Form GR-1040ES. Falling short on estimates triggers penalty and interest, so it’s safer to overpay and collect a refund.

Filing the Annual Return

City income tax returns are due April 30. If April 30 falls on a weekend or holiday, the deadline moves to the next business day.³ Which form you file depends on your situation:

Residents: Form GR-1040R.
Non-residents: Form GR-1040NR.
Part-year residents: a separate part-year return that splits income between resident and non-resident periods.
Corporations: Form GR-1120.
Partnerships: Form GR-1065.

Returns can be filed electronically, uploaded through commercial tax software, or mailed to the Grand Rapids Income Tax P.O. Box. You can request an extension of up to six months, and the city will honor a federal extension for the same period. An extension to file is not an extension to pay. Any tax due on April 30 that goes unpaid starts accumulating penalty and interest right away.

Credit for Taxes Paid to Another Michigan City

If you live in Grand Rapids but work in another Michigan city that levies its own income tax, you can claim a credit on your Grand Rapids return for taxes paid to that other city. The credit is capped at the amount of Grand Rapids tax that would otherwise apply to that income, so it can zero out the doubled portion but cannot reduce your Grand Rapids liability below zero.

Penalties and Interest

The late-filing penalty is 1% of unpaid tax per month or partial month, up to a maximum of 25%.³ Interest accrues at 1 percentage point above the adjusted prime rate, recalculated every January 1 and July 1.⁵ The minimum combined charge is $2. These apply to late returns, unpaid balances, underpaid estimates, and unremitted withholding. Filing on time with a partial payment costs less than filing late.

Property Tax: Assessed Value vs. Taxable Value

Property taxes in Grand Rapids fund the city, Kent County, local school districts, Grand Rapids Community College, and the State Education Tax. Two different values sit behind every bill.

The City Assessor sets each property’s Assessed Value, which under the Michigan constitution equals 50% of True Cash Value (essentially fair market value). Your actual bill is calculated from the Taxable Value, which behaves differently. Under Proposal A, the 1994 constitutional amendment, Taxable Value can rise each year only by the Inflation Rate Multiplier or 5%, whichever is lower, even when market value climbs faster.

The cap breaks when ownership changes. After a sale, the Taxable Value uncaps and resets to match the Assessed Value the following year. A recently purchased home often carries a much higher bill than the identical house next door held for 20 years. If you’re buying, check the current Taxable Value rather than trusting the seller’s tax bill as a preview of your own.

Millage Rates and How the Bill Is Calculated

A mill is $1 of tax per $1,000 of Taxable Value. Your total bill is Taxable Value times combined millage divided by 1,000. For properties in the Grand Rapids City School District, 2025 total millage runs about 33.12 mills for homestead properties and 51.12 mills for non-homestead properties.⁶ The roughly 18-mill difference is the school operating millage that homestead properties don’t pay.

A homestead property with a Taxable Value of $100,000 in the Grand Rapids City School District would owe roughly $3,312 at the 2025 rate. Other school districts inside city limits, such as Kenowa Hills and Godwin Heights, carry slightly different total rates because school levies vary.

Millage rates don’t stay fixed. Under the Headlee Amendment of 1978, if total Taxable Value across a taxing jurisdiction grows faster than inflation, the millage rate rolls back proportionally through a Millage Reduction Fraction.⁷ Voters can override a rollback by approving a millage increase.

Property Tax Exemptions

Principal Residence Exemption

The Principal Residence Exemption (PRE) is the most common form of property tax relief. It exempts your primary home from up to 18 mills of local school operating tax, which is the reason the homestead rate runs so much lower than non-homestead.⁸ You claim it by filing Form 2368 with the City Assessor.

Timing controls how much of the year you get. Filing by June 1 gives you the exemption on both the summer and winter bills that year. Filing between June 2 and November 1 gets you the exemption on the winter bill only. If you buy a home and forget to file, you’ll pay the non-homestead rate on at least one billing cycle.

Disabled Veteran Exemption

A homestead owned and occupied by a disabled veteran honorably discharged from the U.S. armed forces may qualify for a property tax exemption, and the exemption can extend to the veteran’s un-remarried surviving spouse.⁹ Application and documentation go through the City Assessor.

Payment Deadlines and What Happens If You Miss Them

Grand Rapids bills property tax in two installments:

Summer bill mailed the first week of July, due July 31.
Winter bill mailed the first week of December, due February 14.

If a due date falls on a weekend, it moves to the next business day. The due date is printed on each bill.¹⁰

Missing a deadline starts a costly chain. Unpaid taxes are turned over to the Kent County Treasurer in early March of the following year, and a 4% administration fee is added along with 1% interest per month on the base tax.¹¹

If the balance still isn’t paid, the property forfeits to the county treasurer about two years after the original tax year. At forfeiture, a $235 fee is added and the interest rate jumps to 1.5% per month, applied retroactively to the original delinquency date. Fees for certified mailings, personal visits, and publication notices accumulate over the following year. The final deadline to pay and stop foreclosure is March 31 of the third year after the tax year; after that, redemption rights expire and the property is lost.¹² For unpaid 2025 taxes, that means forfeiture in March 2027 and final foreclosure on March 31, 2028.

Other City Charges to Watch For

A few other charges can appear on or affect your property tax obligations. Properties inside the Downtown Development Authority district pay the same millage as everyone else, but the incremental property tax revenue above a baseline year is captured to fund downtown projects through Tax Increment Financing. When the city creates a Special Assessment District for localized work like repaving or sewer upgrades, the benefiting property owners share the cost through assessments added to their bills. Water, sewer, and solid waste charges are billed separately based on usage, but unpaid balances can be placed on the property tax roll, which puts them on the same delinquency and foreclosure track as unpaid property taxes.

1
City of Grand Rapids, MI. Income Tax Guide for Withholders
2
City of Grand Rapids. 2024 Grand Rapids Corporation Income Tax Form and Instructions
3
City of Grand Rapids, MI. Income Tax Guide for Individuals
4
City of Grand Rapids. 2024 Part-Year Resident Income Tax Return Instructions
5
Michigan Legislature. City Income Tax Act, Act 284 of 1964
6
State of Michigan: Treasury. Total Property Tax Rates in Michigan 2025
7
Michigan House Fiscal Agency. Headlee Rollbacks and Millage Reduction Fraction
8
State of Michigan. Form 2368 – Principal Residence Exemption Affidavit
9
State of Michigan: Treasury. Disabled Veterans Exemption
10
City of Grand Rapids, MI. Property Tax Payments and Policies
11
Kent County, MI. Delinquent Property Tax Timeline
12
State of Michigan. Real Property Tax Foreclosure Timeline