BH Working On New Income tax

The city of Benton Harbor’s income tax is now being implemented. City Manager Darwin Watson tells us businesses located within the city have been withholding the tax for affected workers, while those who will need to submit forms themselves to pay the tax will have to do so this spring.

“We’re collecting the withholdings, which by law, we do in advance of the actual filing, which has to happen by April 30 of this year,” Watson said.

Watson says many taxpayers won’t know how much they owe until after they file their federal income taxes.

“We don’t know what that number will be until after we go through the whole mechanics of doing the filings and the enforcement and the compliance that goes with it,” Watson said. “Then we’ll have a more solid number.”

Watson says it’s not yet known how much extra revenue the income tax will mean for the city until all of that is done by the end of April. He says some of what people have paid will have to be refunded to them due to various deductions. The tax is 1% for city residents and 0.5% for non-residents working in the city. Watson says getting everything in place is a major undertaking for city staff, but they’re getting there. This week’s audit report showed the city’s fund balance up more than $800,000 because of money so far withheld by employers.