Key Tax Facts: Michigan
- Flat 4.25% rate; the 4.05% rate applied only to tax year 2023
- Retirement income exemption varies based on birth year
- City income taxes in Detroit (2.4%) and other cities
- Social Security benefits are exempt
Estimate Your 2026 Federal and Michigan State Income Tax
Michigan State Income Tax Overview
Michigan has a flat state income tax rate of 4.25% for all taxpayers. The rate briefly dropped to 4.05% for tax year 2023 under a one-year revenue trigger, then reverted to 4.25% for 2024 and remains there. Michigan has no standard deduction but offers a personal exemption of $5,800 per filer and per dependent. Twenty-four Michigan cities levy their own income tax, including Detroit at 2.4% for residents and 1.2% for non-residents who work in the city. Michigan is phasing in a restoration of the retirement income exemption, which reduces or eliminates state tax on pension income for a growing share of retirees each year.
What Is Different About Michigan's Income Tax
Deductions and exemptions
Michigan has no standard deduction. Personal exemptions of $5,800 per person for 2025 apply for the taxpayer and dependents, with additional exemptions for disabled or veteran filers. Most Michigan cities, including Detroit, levy their own income tax of 1% to 2.4% for residents, filed on a separate city return.
Credits worth knowing
Michigan's earned income credit was raised to 30% of the federal credit starting with tax year 2023. The homestead property tax credit refunds part of property tax or rent for households under an income limit, and a home heating credit assists low-income households.
Retirement, capital gains, and other income
Social Security is exempt. Michigan is phasing out its 2012 retirement tax: for 2025 all filers can deduct 75% of the general retirement subtraction amount regardless of birth year, and the full deduction returns for everyone in 2026. Military and public safety pensions are already fully exempt. Capital gains are taxed at the 4.25% flat rate.
Rules summarized from the Michigan Department of Treasury guidance for tax year 2026. Amounts that index annually are described in general terms; confirm the current figure on the official form instructions.
Michigan Income Tax Rate (2026) projected
Michigan uses a flat income tax rate -- the same percentage applies to all taxable income regardless of how much you earn.
Source: Michigan Department of Treasury
What a Michigan Resident Actually Pays: A Worked Example
| Taxable Income | $65,000.00 |
| Michigan Flat Rate | 4.25% |
| Estimated State Tax | $2762.50 |
| Effective Rate | 4.25% |
Where Michigan Stands Among the 50 States
Michigan's top rate of 4.25% ranks #31 of the 41 states that tax wages. The median top rate across those 41 states is 5.2%, so Michigan is below the middle of the pack. It is one of 14 states with a single flat rate, so every taxable dollar is taxed at 4.25% and the effective rate never climbs with income the way it does in the 27 graduated-rate states.
On sales tax the picture is similar: Michigan's combined state and average local rate of 6% ranks #40 of 50, against a national median of 7.00%.
Michigan State Tax at Five Income Levels (2026, single filer)
| Taxable income | Michigan tax | Effective rate | Marginal rate |
|---|---|---|---|
| $40,000 | $1,700 | 4.25% | 4.25% |
| $65,000 | $2,763 | 4.25% | 4.25% |
| $100,000 | $4,250 | 4.25% | 4.25% |
| $150,000 | $6,375 | 4.25% | 4.25% |
| $250,000 | $10,625 | 4.25% | 4.25% |
Brackets applied directly to the taxable-income figure shown, before Michigan-specific deductions, exemptions, or credits. Federal tax is separate and comes on top of every row.
Michigan vs. Its Neighbors on $75,000 of Taxable Income
A Michigan resident with $75,000 of taxable income pays about $3,188 in state income tax. Of Michigan's 3 neighboring states, 2 would tax that income less and 1 would tax it more.
Frequently Asked Questions -- Michigan Income Tax
Does Michigan have a state income tax?
Yes. Michigan imposes a state income tax with a flat rate of 4.25%. This is separate from your federal income tax obligation.
What is the Michigan income tax rate for 2026?
Michigan uses a flat income tax rate of 4.25% on all taxable income, regardless of income level or filing status.
Do I have to file a Michigan state tax return?
Most full-year Michigan residents with income above the state filing threshold must file a state return. Check the Michigan Department of Treasury for current thresholds and requirements.
How accurate is this estimate?
The federal figure uses the official IRS 2026 brackets and standard deduction. The Michigan figure applies the 2026 single-filer rate schedule to the same taxable income; it does not model Michigan-specific deductions, exemptions, credits, or local income taxes, so treat it as a planning number and confirm with the Michigan Department of Treasury or a tax professional before filing.
How does Michigan compare with nearby states?
On $75,000 of taxable income, Michigan collects about $3,188. Ohio collects $1,346, Indiana collects $2,250, Wisconsin collects $3,579. See the comparison table above.
Where does Michigan rank on state income tax?
Michigan's top rate of 4.25% ranks #31 of the 41 states with an income tax, against a median top rate of 5.2%. Its combined sales tax of 6% ranks #40 of 50.
Does this calculator include federal income tax?
Yes. It estimates your 2026 federal income tax using the official IRS 2026 brackets, then applies the Michigan rate schedule to the same taxable income and shows both figures plus the combined total.
Where can I find official Michigan tax forms?
Official forms, instructions, and filing guidance are available at the Michigan Department of Treasury.
What is the sales tax rate in Michigan?
Michigan's combined state and average local sales tax rate is 6%. This is separate from income tax and applies to most retail purchases -- use our sales tax calculator to check a specific purchase.
When are Michigan 2026 state taxes due?
2026 taxes are generally filed in 2027. The Michigan filing deadline is April 15, 2027, the same as the federal deadline.
Understanding Your Michigan Tax Estimate
Your results combine two separate bills: federal tax owed to the IRS, and Michigan state tax owed to the Michigan Department of Treasury. The state return is filed separately from your federal Form 1040, with a state filing deadline of April 15. For the mechanics of how bracket math actually works -- why your effective rate is almost always lower than your top bracket -- see our marginal vs. effective tax rate guide.
Lowering Your Michigan Bill
Pre-tax retirement contributions reduce your federal and Michigan taxable income in the same move -- see our 401(k) contribution limits and HSA limits guides for the current caps. Beyond that, Michigan-specific credits and deductions that don't exist at the federal level are listed at the Michigan Department of Treasury -- worth checking, since these are easy to miss if you only look at federal guidance.
Combined Sales + Income Tax Picture
Michigan's combined state-plus-average-local sales tax rate is 6%. If you're self-employed, that's an added layer on top of income tax -- our self-employment tax calculator covers the SE-specific piece separately.
Disclaimer: Estimates for educational purposes only. State tax results are approximations based on published bracket data and do not account for all deductions, credits, exemptions, local taxes, or individual situations. Not tax, legal, or financial advice. Consult the Michigan Department of Treasury or a qualified tax professional for guidance specific to your situation.