There is a tree that got planted in a local nursery that they air layered not knowing they don't do good on there own roots. I know that inarching will save the tree which is declining slowly.
Ok question is

How can I determine when to inarch if the tree is declining and doesn't look like it'll put on a new flush to know that the bark is slipping.

The bark does not need to be slipping. Just strip the bark back where you want to attach the new rootstock. You want to two to make very good contact. Ned has a tree at his place that took very well. Maybe Ned can post some photos.

So it will heal and callus without the bark slipping? Do I do a regular t cut like I would be t budding and slip the new rootstock in?

The limb that is to be inarched must be placed close enough to the receiving tree, to easily reach the tree's trunk when bent over. Inarching limbs are practical only with limbs that are comparatively small, preferable 1/4 to 1/2 inch in diameter. The small inarch limbs are cut with a slanting cut so that the cut surface will face the trunk when bent over against it at the point where the union is to be made. A vertical cut of the desired length is then made in the bark of the trunk (receiving tree) at the point where the inarch and trunk can be made to touch. At the base of this vertical cut a cross cut is made resulting in an inverted "T". The end of the inarch is then bent down and pushed up into the slit, as in shield budding, and strips of sealing tape are wound around the union to hold the limbs firmly in place. The wrapping should be allowed to remain for a month or more, until the limbs are very firmly grown together. If the inarch is likely to be under a lot of tension, or if it is on a large limb or trunk that is difficult to wrap, a small nail may be put through the center of the cut end of the inarched limb and driven into the trunk of the tree. This necessitates the use of a very small drill with which to bore a hole through the end of the inarch, so that the nail may be inserted without splitting the wood. In driving the nail into the tree, a small punch should be used, and care should be exercised not to bruise the inarch tissue. Inarches held in place in this way may be covered with grafting wax. (The Citrus Industry Vol. 2) - Millet (925-)

Thanks millet that as the answer I was looking for and as always you guys and gals always come through with great answers.

Just one more thing keeps bothering me. So as laaz mentioned there isn't a need for bark slipping.

That would be for an approach graft.