Michigan income tax rate for 2025 and 2026: a flat 4.25%

Michigan’s income tax rate is 4.25% for tax year 2025 and for tax year 2026, with no brackets. The Michigan Department of Treasury confirmed both rates in notices dated May 1, 2025 and April 15, 2026, and uses 4.25% in its 2026 withholding guide.

A 2015 law (MCL 206.51) cuts the rate for a year when general fund revenue grows faster than inflation. It did so once, to 4.05% for 2023 only; the courts upheld that the cut lasted one year. For 2025 the formula produced no cut, and for 2026 general fund revenue fell 1.56% while inflation rose 2.70%, so the rate stayed at 4.25%.

A Michigan return starts from federal adjusted gross income, copied from Form 1040, then adds and subtracts Michigan items on Schedule 1, such as the subtraction for Social Security and retirement income. Michigan has no standard deduction; instead you subtract a personal exemption for yourself, your spouse and each dependent, then apply 4.25%.

For example, a single filer with $60,000 of wages and no other adjustments subtracts the $5,800 exemption for 2025 and owes $2,304 to Michigan; for 2026, with the $5,900 exemption, the tax is $2,299. A city income tax, where one applies, is extra.

The July 2025 federal tax law (Public Law 119-21) created deductions for 2025 through 2028 for qualified tips (up to $25,000) and overtime pay (up to $12,500, or $25,000 on a joint return), along with car loan interest (up to $10,000) and an extra $6,000 for people 65 or older. They come after federal AGI, where Michigan starts, so on their own they do not reach the Michigan return.

Michigan then passed its own version for tips and overtime: Public Act 24 of 2025, signed October 7, 2025. Treasury says the Michigan deductions “are only available for the 2026, 2027, and 2028 tax years” and that for 2025 they “will not be available in Michigan”. The Michigan deduction generally mirrors the federal one, so the federal limits apply, and nonresidents can deduct only tips and overtime earned for work in Michigan.

Michigan has no state version of the federal car loan interest or $6,000 senior deductions. The same law decoupled Michigan from several federal business provisions, including bonus depreciation, from 2025.

Michigan does not tax Social Security: you subtract the taxable part on Schedule 1. Military retirement pay, Michigan National Guard retirement and railroad retirement benefits are not taxed either.

Pensions and other retirement income are being phased out of the tax under a 2023 law. For 2025, people born from 1946 through 1966 could subtract up to 75% of the full limit: $49,423 single or $98,846 joint. From 2026, everyone can subtract qualifying retirement and pension benefits up to the full limit, whatever their birth year: $67,610 single or $135,220 joint. Retirees can still choose an older calculation method if it gives them more.

Credits come off the tax, and the EITC and the homestead and home heating credits are paid to you even if you owe no tax.

Treasury lists 24 Michigan cities that levy an income tax. Under the Uniform City Income Tax Ordinance the standard rate is 1% for residents and 0.5% for nonresidents who work in the city; a city of more than 600,000 people, which means Detroit, may charge up to 2.4% and 1.2%. Each city runs its own tax and return, except Detroit, which Treasury administers; from tax year 2026 Treasury also processes Flint’s returns.

The other cities on Treasury’s list are Albion, Battle Creek, Benton Harbor, Grayling, Hamtramck, Highland Park, Hudson, Lansing, Lapeer, Muskegon Heights, Pontiac, Port Huron, Springfield and Walker. Check the rate and due date with the city itself; some city returns are due April 30 rather than April 15.

File a Michigan return if you owe tax, are due a refund, or your AGI is more than your exemption allowance. Couples who file a joint federal return must file jointly in Michigan. Residents file Form MI-1040 with Schedule 1 for additions and subtractions and Form 4884 for retirement income; part-year residents and nonresidents add Schedule NR.

2025 returns were due April 15, 2026; Michigan’s due date is the 15th day of the fourth month after the tax year, April 15, 2027 for 2026 returns. A federal extension extends the Michigan return automatically; without one, file Form 4 with a payment by April 15. An extension does not extend the time to pay, and you need none if you expect a refund.

Check a Michigan refund through “Where’s My Refund?” in Michigan Treasury eServices, linked from michigan.gov/taxes/iit/refund. It asks for the primary filer’s SSN and last name, the tax year, your filing status and your AGI (or total household resources for a property tax or heating credit claim). Status updates overnight, Monday through Friday.

Treasury says to allow 4 to 6 weeks after your e-filed return is accepted, and 6 to 8 weeks after mailing a paper return, before checking. Once a return is processed, the refund is issued within 5 to 7 business days. About 10% of returns need extra review, and Treasury pays interest on refunds that take more than 45 days from the due date or filing. Debts owed to the state are taken out first.

Michigan has reciprocal agreements with Illinois, Indiana, Kentucky, Minnesota, Ohio and Wisconsin. A resident of one of those states pays tax on Michigan wages only at home, and gives the employer Form MI-W4 to stop Michigan withholding. If Michigan tax was withheld anyway, you get it back by filing an MI-1040 with Schedule NR. The agreements cover salaries and wages only, not business income from Michigan, and they do not cover city taxes: a nonresident working in Detroit or Grand Rapids still owes that city’s nonresident tax.

Michigan residents pay only Michigan tax on wages earned in those six states. For income taxed by any other state, DC or a city outside Michigan, they claim a credit on the MI-1040. In the year you move, Schedule NR taxes what you earned while living in Michigan; spending winters in another state does not make you a part-year resident.