2020 INSTRUCTIONS FOR FORM PH-1040 
              CITY OF PORT HURON INDIVIDUAL INCOME TAX RETURN 
                                            ALL FILERS 
 
WHO MUST FILE A RETURN 
  Everyone who has income that is subject to City tax must file a PH-1040 return.  You do not have to file a return 
if your total income subject to tax is less than your exemption credit ($600 per person).  You must file a City return 
even if you do not file a Federal return.  To claim a refund, you must file a return. 
  Married persons may file either a joint or separate returns.  Joint returns must include the names, social security 
numbers, and signatures of both parties. 

ROUNDING 
  Round all amounts that you report on your return to the nearest dollar. Do not enter cents on your City return.  If 
you have to add two or more amounts to get the amount to enter on a line, add the cents and round off the total.   
Round down all amounts less than 50 cents.  Increase amounts from 50 cents through 99 cents to the next dollar. 

ESTIMATED TAX PAYMENTS        
  Generally, you must make estimated tax payments when your total City tax will exceed the amount withheld from 
your pay (plus other credits) by $100, or more.  To make estimated payments, use form PH-1040ES, Declaration of 
Estimated Tax.  File the form by April 30 of the year and pay at least one-fourth (¼) of the estimated tax.  The rest 
will be due in three equal payments, due on June 30, September 30, and January 31.  You may amend your estimate 
when you make a payment.  We assess both penalty and interest if you fail to make estimated tax payments 
when required.  You must file an annual return even if there is no change in the declared tax liability or more tax 
due. 

DATE DUE AND EXTENSIONS 
  Returns are due on or before April 30, 2021.  To get an extension, use form PH-4868, Application for Extension 
of Time to File a City Income Tax Return.  File the form on or before the due date of your return.  An extension does 
not extend the time for paying the tax due.  To get the extension, you must pay the total expected tax due with the 
form.  We will charge you penalty and interest if you underestimate or fail to pay the estimated tax due.  You do not 
need to file an extension if you will be claiming a refund. 

CHARGES FOR LATE PAYMENTS 
  We assess both penalty and interest on all late payments.  The penalty is 1% of the balance due for each month 
your payment is late.  The maximum penalty is 25% of the balance due.  We assess interest at 1/12 of the annual 
rate (a variable rate that changes twice a year) for each month the payment is late.  The State of Michigan computes 
the interest rate based on the prime rate.  The minimum charge for penalty and interest is $2.00. 

ASSISTANCE 
  If you have questions or need help, call (810) 984-9741, email incometax@porthuron.org,           or visit our office in 
Room 112 of the Municipal Office Center, 100 McMorran Boulevard, Port Huron, Michigan 48060. 

HEADING INFORMATION 
● Always write your social security number(s) on the return.  The mailing label does not show your social security 
number(s).  Your social security numbers must agree with your W-2's.  
● Show your name, and if a joint return, your spouse's name, in the proper boxes. 
● Show your current address in the proper boxes.  If you use a P.O. Box or an address that is not your legal residence, 
you must attach a statement that states your actual residence.  
● If the name(s), address and filing status this year is the same as last year, check the proper box.  If there is a 
change, please give a brief explanation in the space provided. 
● Show the name of your present employer.  Please be specific, name your actual work location. 
 

RESIDENCY STATUS 
● RESIDENT - is a person who domiciled in the City of Port Huron during the tax year. 
 File as a resident if:  
 1)   You were a resident the entire year, or 
 2)   You  were  a  resident  for  only  part  of  the  year and  had  no  income  subject  to  City  tax  while  you  were  a 
 nonresident.  Exclude amounts that are not subject to City tax in Column II. 
● NONRESIDENT - is a person who did not domicile in the City of Port Huron during the year.  
 File as a nonresident if: 
 1)   You were a nonresident the entire year, or 
 2)  You were a nonresident for only part of the year but had no income while you were a resident. 
● PARTIAL RESIDENT - is a person who had income subject to City tax as a resident and as a nonresident.  Partial 
residents must compute the amount of their tax on Schedule L (Multiple Tax Rate Schedule). You can get a copy of 
Schedule L by calling our office at (810) 984-9741 or by visiting our website, www.porthuron.org.  
EXEMPTIONS 
 Everyone who files a City return gets a personal exemption of $600.  You get an exemption even if someone 
else claims you as a dependent on their return (this may differ from Federal and State rules).  You get an extra 
exemption if you are age sixty-five or older, blind, deaf or permanently disabled as defined by the ordinance. 
 Determine dependents using the same rules that apply to your Federal return.  If you cannot claim a dependent 
on your Federal return, you cannot claim the person on your City return. 
INCOME EXEMPT FROM CITY TAX 
 We do not tax the following types of income: 
● Gifts and bequests. 
● Social security benefits, Railroad Retirement Act benefits. 
●  Pensions  and  annuities,  including  disability  pensions.    Early  distributions  are  taxable.   The  city  will  not  tax 
distributions caused by the rollover of a traditional IRA into a Roth IRA. 
● Exclude proceeds of insurance and amounts received for personal injuries, sickness, or disability     to the extent 
provided by the Federal Internal Revenue Code. 
● Welfare relief, unemployment benefits including supplemental unemployment benefits (S.U.B. pay), and worker’s 
compensation or similar payments. 
● Interest from obligations of the United States, the states, or subordinate units of government of the states. 
● Pay received for service in the armed forces of the United States, including Reserve and National Guard pay. 
DEDUCTIONS FROM INCOME 
 We  do not  allow  deductions  for  items  such  as  taxes,  interest,  medical  expenses,  charitable  contributions, 
casualty and theft losses, etc.  You can only deduct amounts that directly relate to income that is taxable by the City.  
You must prorate amounts where necessary.  The only deductions are as follows: 
(A)  Unreimbursed Employee Business Expenses - we allow these expenses only to the extent your employer does 
 not pay them.  The expenses are strictly limited to the following: 
 1.  Expenses of travel, meals and lodging while away from home. 
 2.  Expenses of an outside salesperson, who works away from their employer's place of business. This does 
 not include a salesperson whose primary duty is service and delivery. 
 3.  Expenses of transportation, but not commuting to and from work. 
 4.  Expenses reimbursed (under an expense account or other arrangement with your employer) where your 
 employer included the amount in your gross earnings. 
 Note: You must attach a schedule detailing the amounts you are claiming as unreimbursed employee 
 business expenses on your City return.  Deductions are strictly limited to the items noted above.  
(B)  A self-employed person may deduct payments to a qualified retirement plan (a Keogh plan). 
(C)  You may deduct contributions to an Individual Retirement Account     to the extent your earnings are subject to 
 City tax.  The deduction is limited to the amount you can deduct on your Federal return.  You must prorate IRA 
 deductions with respect to each person.  Prorate the deduction based on the percentage of the persons’ income 

   that is subject to City tax. YOU MUST ATTACH PROOF OF YOUR PAYMENT (such as a receipt or canceled 
   check clearly showing an IRA purchase).  
(D)  You may deduct moving expenses if you are a member of the Armed Forces on active duty and you move into 
   the taxing area because of a permanent change of station.  The deduction is limited to the amount deductible on 
   your Federal return.  Prorate the deduction based on the portion of your earnings that are subject to City tax after 
   the move.  Attach a copy of your Federal form 3903 to your return. 
(E)  You may deduct alimony, separate maintenance payments and principal sums payable in installments, to the 
   extent deductible on your Federal return.  For divorce decrees signed after December 31, 2018 that require 
   alimony payments, the payer will not be allowed a deduction for payments made.  YOU CANNOT DEDUCT 
   CHILD SUPPORT.  Nonresidents must prorate the deduction.  Prorate the deduction based on the percentage 
   of your income that is taxable by the City as it relates to your Federal Adjusted Gross Income. 
IMPORTANT: All deductions are limited to the extent they apply to income that is taxable by the City.  Items (B) 
through (E) above are limited to the amount deductible on your Federal return.  You must attach a copy of the 
proper Federal schedule supporting the amount of any deduction. 
TAX COMPUTATION 
● TOTAL INCOME (line 9) - Enter the total of all taxable income, column III, lines 1 through 8. 
● EXEMPTION CREDIT (line 10) - Multiply the number of exemptions claimed on your return by $600.00.  This is 
your exemption credit. 
● TAXABLE INCOME (line 11) - Subtract line 10 from line 9.  If line 10 is greater than line 9, enter zero.  This is your 
taxable income. 
● AMOUNT OF TAX (line 12) - Multiply line 11 by 1% (.01) if you were a resident and by ½ of 1% (.005) if you were 
a nonresident.  The result is the amount of your tax.  Partial residents will compute the amount of tax on Schedule L. 
PAYMENTS AND TAX CREDITS 
● PORT HURON TAX WITHHELD (line 13) - Enter the total amount of Port Huron income tax withheld from your 
pay.  The W-2 (Wage and Tax Statement) you received from your employer(s) shows the tax withheld.    You must 
attach a copy of the W-2 form(s) showing the ENTIRE AMOUNT of City tax withheld.  We will not allow the credit 
without these forms.  We will accept photocopies. 
● ESTIMATED TAX PAYMENTS (line 14) - Enter the total of estimated tax payments you made to the City of Port 
Huron for the tax year.  Include in the total any credit carried forward from last year and payments you made with a 
request for extension. 
● CREDIT FOR INCOME TAX PAID TO ANOTHER CITY (line 16) - If while a resident, you had income subject to 
tax in another City, we will allow you a credit on your return.  The credit IS NOT NECESSARILY the tax paid to the 
other City.  The credit is the tax a nonresident would pay on the same income, or the tax paid to the other City, 
whichever is less.  Generally, (because no city has a lower tax rate) the credit will be ½ of 1% (.005) of: income 
earned in the other City subject to dual tax less Port Huron exemptions.  To get the credit, you MUST attach a 
copy of the return filed with the other City to your Port Huron return. 
TAX DUE OR REFUND  
● BALANCE DUE (line 18) - If line 12 exceeds line 17, enter the difference on line 18.  This is your balance due.  
YOU MUST PAY THE BALANCE DUE WHEN YOU FILE THE RETURN.  Make your check or money order payable 
to: City of Port Huron.  Mail both the return and your payment to: Income Tax Division, 100 McMorran Boulevard, 
Port Huron, Michigan 48060.  If you are paying in person, please pay at the City Treasurer's office.  You may also 
pay online by visiting the Income Tax Department page at www.porthuron.org. 
● OVERPAYMENT (line 19) - If line 17 exceeds line 12, enter the difference on line 19.  This is the amount you 
overpaid.  Show on line 20 whether you want your overpayment refunded or credited to next year’s estimated taxes.  
Mail the return to: Income Tax Division, 100 McMorran Boulevard, Port Huron, Michigan 48060.  We will send your 
refund as quickly as possible.  PLEASE ALLOW 45 DAYS before making an inquiry. 
● You must file the return even if there is no tax due or overpayment.  
 

                      SPECIFIC INSTRUCTIONS FOR PARTIAL RESIDENTS 
     If you had income taxable as a resident and as a nonresident during the year, you must file as a partial resident.  
Partial residents compute the amount of their tax on Schedule L (Multiple Tax Rate Schedule).  Complete the form 
using the instructions found on Schedule L.  To decide the taxability of items while a resident, refer to the "Specific 
Instructions for Residents" section of these instructions.  To decide the taxability of items while a nonresident, refer 
to the "Specific Instructions for Nonresidents" section. 
     This booklet does not include Schedule L.  You can get a Schedule L by calling us at (810) 984-9741.  Schedule 
L is also available online at the city’s web site: www.porthuron.org 
                             SPECIFIC INSTRUCTIONS FOR RESIDENTS 
● WAGES, SALARIES, TIPS, ETC. (line 1) - All amounts earned by City residents are taxable (including salary, 
wages, bonuses, tips, commissions, sick pay, and other compensation). It does not matter where you worked.  If you 
are a resident, the same tax rate applies to amounts earned both inside and outside the City.  We do not tax pay you 
received for service in the armed forces of the United States (including Reserve and National Guard pay). 
     If you were a resident for only part of the year, exclude in Column II amounts you earned outside the City 
while a nonresident. 
     If you worked for an employer outside the City while you were a resident and a nonresident during the year, you 
must prorate your income from that employer.  Prorate the income based on the time you were a resident while 
working for the employer in relation to the total time you worked for the employer during the year.  Note: If you worked 
for an employer inside the City while you were a nonresident you cannot file as a resident.  See the Residency Status 
section of the instructions. 
     Be sure to attach copies of all W-2's to your return.  We will accept photocopies.  You MUST attach a copy of 
any W-2 showing Port Huron tax withheld.  We will not allow you a credit without these forms.  If you worked for 
an employer who did not withhold the tax, and you do not have an extra W-2, list the information on the back of 
the return. 
● INTEREST INCOME (line 2) - The interest income of City residents is taxable.  We do not tax interest from federal, 
state or municipal government obligations.  Exclude nontaxable amounts in Column II and show why you excluded 
it.  
● DIVIDEND INCOME (line 3) - The dividend income of residents is taxable. Determine dividend income using the 
same rules that apply to your Federal return.  The City taxes property distributions from an S Corporation as dividends 
(see supplemental income).  
● BUSINESS INCOME (line 4) - All self-employment income of City residents is taxable.  The location of your 
business or profession does not matter. Attach a copy of your Federal Schedule C to the return. 
● CAPITAL GAINS (line 5) - All long and short term capital gains are taxable.  Attach a copy of your Federal 
Schedule D and form 4797 to your return.  Exclude any portion of a gain or loss occurring before January 1, 1969.  
Compute the exclusion by using one of the following methods: 
     1)   The difference between the purchase price and the fair market value of the asset on 1/1/69.  
     2)   Prorate the amount based on the number of months since 1/1/69 in relation to the total number of months 
        held.  
● SUPPLEMENTAL INCOME (line 6) - Supplemental income as defined for Federal tax purposes is taxable.  Except, 
the UNDISTRIBUTED share of Sub Chapter S corporation earnings is not taxable.  Include in dividend income any 
distribution you received from an S Corporation.  Be sure to attach a copy of your Federal Schedule E (pages 1 
& 2) to your return.  
● OTHER INCOME (line 7)       - Enter any other income you reported on your Federal return.  Exclude amounts that are 
not taxable in Column II.  On the back of the return, show what the exclusions are.  State and local refunds are not 
taxable. Unemployment and social security benefits are not taxable.  Please review the "Income Exempt from City 
Tax" section of the instructions. 
● ADJUSTMENTS (line 8) - Enter your total adjustments and deductions on this line.  On the back of the return 
identify all parts of the total.  Please read the "Deductions from Income" section of the instructions.  You must attach 
copies of the proper Federal schedules or other support to your return.  Failure to attach the proper schedules or 
support will delay the processing of your return.  If you do not provide the information that we have requested, we will 
not allow the deduction.  You must attach a receipt for any IRA deduction. 
 

                   SPECIFIC INSTRUCTIONS FOR NONRESIDENTS                    
● WAGES, SALARIES, TIPS, ETC. (line 1) - We tax the earnings of nonresidents related to work done or services 
rendered in the City of Port Huron.  We do not tax amounts earned by a nonresident for work outside Port Huron. 
 If you worked for the same employer both inside and outside the City, use Schedule A to compute your excludable 
wages.  Complete a separate Schedule A for each employer that paid you (or your spouse) wages for work both 
inside and outside the City.  You must exclude vacation and sick time from the calculation.  Pay for vacation, sick 
time, bonuses, etc., is taxable in the same ratio as other earnings.  Other methods used to calculate the exclusion 
(such as hours worked, commission dollars, etc.) are generally acceptable.  
 Be sure to attach copies of all your W-2's to the return.  We will accept photocopies.  You MUST attach a copy 
of any W-2 showing Port Huron tax withheld.  We will not allow you a credit without these forms. 
● INTEREST AND DIVIDENDS (lines 2 & 3) - The interest and dividend income of nonresidents is NOT TAXABLE.  
Exclude all interest and dividends.  
● BUSINESS INCOME (line 4) - We tax nonresidents on business activity conducted within the City of Port Huron.  
If you conducted a business activity both inside and outside the City, use the Business Allocation Formula, Schedule 
B.  Complete the schedule according to the captions.  When computing the average percentage, exclude a factor 
only when the factor does not exist.  In such cases, divide the sum of the percentages by the number of factors used.  
A separate calculation must be done for each business activity.  Exclude any business activity conducted entirely 
outside the City in Column II.  Attach a copy of your Federal Schedule C to your City return. 
● CAPITAL GAINS (line 5) - We tax nonresidents on gains and losses arising from the sale or exchange of property 
located in the City of Port Huron.   Attach a copy of your Federal Schedule D and form 4797 to your return.  
Exclude any portion of a gain or loss occurring before January 1, 1969.  Compute the exclusion using one of the 
following methods: 
 1)   The difference between the purchase price and the fair market value of the asset on 1/1/69.  
 2)   Prorate the amount based on the number of months since 1/1/69 in relation to the total number of months 
 held.  
● SUPPLEMENTAL INCOME (line 6) - We tax nonresidents on rental income from property in the City.  Nonresidents 
are also taxed on their share of profits from partnerships doing business in the City.  Exclude any such income 
generated outside the City.  We allow passive losses to the same extent as your Federal return.  Be sure to attach 
a copy of your Federal Schedule E (pages 1 & 2) to your return. 
● OTHER INCOME (line 7) - Enter any other income you reported on your Federal return on this line.  Exclude 
amounts that are not taxable in Column II.  On the back of the return, show what the exclusions are.  State and 
Federal refunds are not taxable. Unemployment and social security benefits are not taxable.  Please review the 
"Income Exempt from City Tax" section of the instructions. 
● ADJUSTMENTS (line 8) - Enter your total adjustments and deductions on this line.  On the back of the return 
identify all parts of the total.  Please review the "Deductions from Income" section of the instructions.  YOU MUST 
PRORATE DEDUCTIONS BASED ON THE INCOME SUBJECT TO CITY TAX.  You must attach copies of the proper 
Federal schedules or other support to your return.  Failure to attach the schedules or support will delay the processing 
of  your  return.    If  you  do  not  provide  the  information  that  we  have  requested,  we  will  not  allow  the  deduction.  
 You must attach a receipt for any IRA deduction.