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Use the Exclusions and Adjustments to Other Gains or (Losses) 3. Benefits paid from a retirement annuity policy other than annuitized
schedule to compute exclusions and adjustments to other gains and benefits paid over the life of the individual are taxable to the same
losses reported on your federal income tax return. extent taxable under the Internal Revenue Code.
Line 9 –IRA Distributions Report taxable pension and retirement income on line 10, column C.
In column A enter the IRA distributions reported on federal Form Line 11 – Rental Real Estate, Royalties, S Corporations, Partner-
1040. Premature IRA distributions (Form 1099-R, box 7, ships, Royalties, Estates, Trust, Etc.
distribution code 1) and IRA distributions made to a All income reported on federal Schedule E may be taxable. A resident’s
decedent’s beneficiary other than the decedent’s spouse (Form share of an S corporation’s flow through income is not taxable. Report
1099-R, box 7, distribution code 4) are taxable. this income on line 11, columns A.
Exclude in column B, IRA distributions qualifying as retirement benefits: Line 12 –Subchapter S Corporation Distributions
IRA distributions received after age 59½ or described by Section 72(t) S corporation distributions received by a resident from the corporation’s
(2)(A)(iv) of the IRC and all other excludible IRA distributions. The Accumulated Adjustments Account, Other Adjustments Account and/or
Exclusions and Adjustments to IRA Distributions schedule is used the Shareholder’s Undistributed Taxable Income Previously Taxed
to document excluded IRA distributions. Account (federal Form 1120S, Schedule M-2, line 7) are income on a
Line 10 –Taxable Pension Distributions city return and are to be reported on this line. These distributions are
Enter on line 10, column A, pension and annuities reported on found on federal Schedule K-1 (1120), line 16. Report these
federal Form 1040. Excluded pension and retirement benefits are distributions on the Adjustments for Tax Option Corporation (like
reported on line 10, column B and explained on the Exclusions Subchapter S Corporation) Distributions schedule. Also attach copies
and Adjustments to Pension Distributions schedule. of federal Schedule K-1 (Form 1120S).
Pension and retirement benefits from the following are not taxable:
1. Pension plans that define eligibility for retirement and set contribution Line 13 – Farm Income (Or Loss)
and benefit amounts in advance; Profit or loss from the operation of a farm is taxable as reported on the
2. Qualified retirement plans for the self-employed; federal return regardless of where the farm is located. There are no
3. Distributions from a 401(k) or 403(b) plan attributable to employer exclusions. Attach a complete copy of federal Schedule F.
contributions or attributable to employee contributions to the extent Line 14 – Unemployment Compensation
they result in matching contributions by the employer; NOT TAXABLE. Exclude all. No explanation needed.
4. Benefits from any of the previous plans received on account of Line 15 – Social Security Benefits
disability or as a surviving spouse if the decedent qualified for the NOT TAXABLE. Exclude all. No explanation needed.
exclusion at the time of death; Line 16 –Other Income
5. Benefits paid to an individual from a retirement annuity policy that Other income reported on the resident’s federal return is taxable except
has been annuitized and paid over the life of the individual. for income from recoveries related to federal itemized deductions from
Pension and retirement benefits from the following are taxable: prior tax years. Report on this line a net operating loss carryover from
1. Premature pension plan distributions (those received prior to the previous tax year. Complete report exclusions and adjustments on
qualifying for retirement); p. 2, using the Line 16 - Exclusions and Adjustments to Other
2. Amounts received from deferred compensation plans that let the Income schedule.
employee set the amount to be put aside and do not set retirement
age or requirements for years of service. These plans include, but Line 17 –Total Additions Add lines 2 through 16.
are not limited to, plans under IRC Sections 401(k), 457 and 403(b): Line 18 –Total Income
Add lines 1 through 16 of each column and enter amounts on line 18.
Amounts received before the recipient could retire under
the plan provisions, including amounts paid on Line 19 –Deductions
separation, withdrawal or discontinuance of the plan; Enter amount from Deductions schedule, page 2, line 7.
Amounts received as early retirement incentives, unless
the incentives were paid from a pension trust;
NONRESIDENTS
NONRESIDENT INCOME SUBJECT TO TAX:
1. Compensation for work done or services performed in the city, which and listed, by employer, on the Excluded Wages schedule on page 2
includes, but is not limited to, the following: salaries, wages, of the tax form on line 1-10. On the Excludible Wages, Salaries,
bonuses, commissions, fees, tips, incentive payments, severance Tips, Etc. schedule, lines 7 and 8, list the reason the wages are
pay, vacation pay and sick pay. excludible and the address of the work station where work was
2. Net profits of from the operation of an unincorporated business, performed for the employer.
profession or other activity attributable to business activity conducted Do not use box 18 of W-2 form to report taxable wages or to
in Lansing, whether or not such business is located in Lansing. allocate wages: use box 1 wages only. A separate wage allocation
3. Gains or losses from the sale or exchange of real or tangible must be completed for each employer. Wages are normally allocated
personal property located in Lansing. using the actual number of days or hours worked in and outside the city
4 Net profits from the rental of real or tangible personal property during the tax year for an employer. Vacation time, sick time and
located in Lansing. holidays are not included in total days worked in arriving at the wage
5. Premature distributions from an Individual Retirement Account (IRA) allocation percentage. Vacation pay, holiday pay, sick pay, bonuses,
where a deduction was claimed on a current or previous year’s city severance pay, etc. are taxable to same extent as normal earnings.
income tax return. All wages, salaries, tips, sick pay, bonuses,
6. Premature distributions from a pension plan attributable to work 100% Earned in Lansing.
performed in Lansing. deferred compensation, severance pay, and other compensation (Form
7. Deferred compensation earned in Lansing before retirement. W-2, box 1) is taxable to nonresidents who worked 100% of the time in
the city.
Line 1 –Wages, Salaries, Tips, Etc. Allocate Total Wages. Nonresidents who performed only part of their
All wages taxed on the federal return are to be reported on page 1, services for an employer in the city must allocate their wages using the
line1, column A of the city return. All W-2 forms showing income earned Compute excludible wages using
in Lansing and or tax withheld for Lansing must be attached to W-2 form box 1 amount, not box 18.
the return. the Nonresident and Part-Year Resident Wage Allocation section of the
Excludible Wages, Salaries, Tips, Etc. schedule.
Page 1 & 2 and Schedule 1 of the federal tax return must be Wage Allocations on Commissions, Etc. A nonresident salesperson
attached to all resident tax returns. paid on a commission basis or other results achieved should allocate
wages based on commissions received or other results achieved
Report on page 1, line 1, column B, the total excluded wages. attributable to efforts expended in Lansing. A nonresident insurance
All excluded wages must be documented on the Excludible salesperson paid sales commissions and renewal commissions should
Wages, Salaries, Tips, Etc. schedule allocate compensation on the following basis: Allocate commissions
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