What is Michigan Income Tax? Rates & Tax Brackets

Updated for tax year 2025.

If you live or work in Michigan, you’ll likely need to file a Michigan state income tax return along with your federal return. Michigan uses a flat income tax system, so the same rate applies to your taxable income regardless of filing status.

This guide explains Michigan’s 2025 income tax rate, personal exemptions, available deductions and credits, local city income taxes, and the updates for the current tax year. When you’re ready to file, TaxAct® automatically applies Michigan’s tax rules to help you accurately prepare your Michigan return alongside your federal return.

What is the Michigan state income tax?

Michigan imposes an individual income tax on Michigan taxable income. The tax is collected by the Michigan Department of Treasury to help fund state programs and services.

Michigan uses a flat income tax rate, so taxpayers generally pay the same state tax rate regardless of income level. For tax year 2025, the Michigan individual income tax rate is 4.25%. The state may lower the rate in future years if certain revenue and inflation requirements are met, but no rate reduction applies for 2025.

Michigan income tax rates and tax brackets

The state of Michigan imposes a flat 4.25% tax rate. That means that, regardless of filing status or income level, every taxpayer’s income is taxed at the same rate.

Filer Type	Tax Rate
Single	4.25%
Married Filing Separately	4.25%
Married Filing Jointly	4.25%
Head of Household	4.25%

If you need more information on how federal tax brackets work, you can use our tax bracket calculator for federal taxes.

Michigan standard deduction

Michigan does not offer a standard deduction for all taxpayers like the federal return does. Instead, most filers lower their Michigan taxable income through personal exemptions and other eligible subtractions on Form MI-1040 (see next section).

However, some seniors and retirees may qualify for the Michigan Standard Deduction as one of their retirement income subtraction options. Eligibility depends on factors such as your age, birth year, and the type of income you receive.

For 2025, eligible taxpayers may be able to claim the following Michigan Standard Deduction:

Single: $20,000
Married filing jointly: $40,000

For 2025, the $20,000/$40,000 Michigan Standard Deduction is available only to qualifying taxpayers based on age and birth year. The amounts that reduce the deduction differ between Tier 2 and Tier 3 taxpayers, so filers should use Michigan Schedule 1 and Worksheet 2 to determine the allowable amount.

Michigan exemptions, deductions, and credits

Michigan generally reduces taxable income through personal exemptions and other eligible subtractions on Form MI-1040. You may need to file a Michigan return if your income exceeds your Michigan exemption amount. Depending on your situation, you may also qualify for deductions, subtractions, or tax credits that can help lower your tax bill.

For tax year 2025, Michigan personal exemption amounts include:

Exemption type	2025 amount
Personal and dependent exemption	$5,800
Special exemption (totally and permanently disabled, deaf, blind, hemiplegic, paraplegic, or quadriplegic) may not be claimed if the taxpayer was age 66 by Feb. 28, 2025	$3,400
Qualified disabled veteran deduction	$500

Other common Michigan tax breaks include:

Retirement and pension benefits subtraction — You may be able to subtract qualifying retirement or pension income that is included in your federal adjusted gross income. The amount depends on factors such as your birth year and filing status.
Homestead Property Tax Credit — Eligible Michigan homeowners and renters may qualify for this credit if their property taxes or rent are high compared with their total household resources. You can claim it using Form MI-1040CR.
Michigan Earned Income Tax Credit for Working Families — If you qualify for the federal earned income tax credit (EITC), you may also qualify for a Michigan credit equal to 30% of your federal EITC.

For a full list of Michigan income tax credits, exemptions, and subtractions, see the Michigan Department of Treasury.

Michigan city taxes

Michigan has a flat statewide income tax, but depending on where you live or work, you may also owe a local city income tax.

Several Michigan cities charge a 1% income tax for residents and a 0.5% tax for nonresidents who work in the city. These include: Albion, Battle Creek, Benton Harbor, Big Rapids, East Lansing, Flint, Grayling, Hamtramck, Hudson, Ionia, Jackson, Lansing, Lapeer, Muskegon, Muskegon Heights, Pontiac, Port Huron, Portland, Springfield, and Walker.

There are a few exceptions to this, however, as outlined below:

City	Residents	Non-residents
Grand Rapids	1.5%	0.75%
Highland Park	2%	1%
Detroit	2.4%	1.2%
Saginaw	1.5%	0.75%

Learn more about Michigan city income taxes on the Department of Treasury website.

Michigan tax changes for 2025

The personal and dependent exemption allowance increased from $5,600 to $5,800 for tax year 2025.
The retirement and pension phase-in subtraction increased from 50% of the applicable private pension limit in 2024 to 75% for qualifying taxpayers in 2025.
Public Act 24 of 2025 updated Michigan’s Internal Revenue Code conformity date and decoupled Michigan from certain federal Working Families Tax Cut Act (One Big Beautiful Bill or OBBB) provisions for tax year 2025, including bonus depreciation rules.
Michigan adopted parallel state deductions for qualified tips and qualified overtime compensation under Public Act 24 of 2025, but those do not go into effect until tax year 2026.

Read up on Michigan tax changes for 2025.

FAQs

Does Michigan have a state income tax?

Yes, Michigan has a state income tax.

What is the Michigan income tax rate?

Michigan’s individual income tax rate is 4.25% for tax year 2025. Because Michigan uses a flat tax, the same rate applies regardless of your income level or filing status.

What are the Michigan income tax brackets for 2025?

Michigan does not have income tax brackets for tax year 2025, but instead uses a flat rate of 4.25% for all filers. See the Michigan income tax rates table above for filing-status details.

How does Michigan state income tax work?

Michigan generally starts with your federal adjusted gross income (AGI) on Form MI-1040. From there, you’ll make any required Michigan additions and subtractions on Schedule 1, claim your personal exemption allowance, and subtract any other deductions you qualify for, such as eligible retirement or pension benefits or the Michigan Standard Deduction (you may have to choose among available retirement subtraction methods).

Michigan then applies its flat 4.25% income tax rate to your Michigan taxable income. You may also qualify for credits, such as the Homestead Property Tax Credit or the Michigan Earned Income Tax Credit, which can help lower your final tax bill.

Keep in mind that some Michigan cities also charge a local income tax, so you may have an additional filing requirement depending on where you live or work.

Do I have to file a Michigan state tax return?

Full-year Michigan residents who are required to file a federal income tax return generally must also file a Michigan return, even if they owe no Michigan tax. If a full-year resident is not required to file federally, a Michigan return is generally required when income included in federal AGI exceeds the taxpayer’s allowed Michigan exemption allowance(s). Part-year residents and nonresidents may have separate filing requirements for Michigan-source income, and special rules apply to residents of Michigan’s reciprocal states. Check Michigan Department of Treasury guidance for your situation.

What is the Michigan standard deduction for 2025?

Michigan does not offer a standard deduction for all taxpayers the way the federal return does. Most filers reduce taxable income through personal exemption allowances; however, certain eligible retirees may claim the Michigan Standard Deduction — up to $20,000 for single filers and $40,000 for joint filers in 2025.

How much is Michigan state income tax?

There’s no single Michigan state income tax amount that applies to everyone. What you owe depends on factors like your taxable income, personal exemptions, eligible retirement subtractions, and available tax credits. Michigan applies a flat 4.25% tax rate to your Michigan taxable income after those adjustments. Depending on where you live or work, you may also owe a separate city income tax.

Why is my Michigan tax return different from my federal return?

Michigan generally uses federal adjusted gross income as a starting point, but Michigan has its own exemption allowances, subtractions, and credits that can make your Michigan taxable income different from your federal return. For example, Public Act 24 of 2025 also decoupled Michigan from certain federal tax law changes in the Working Families Tax Cut Act for tax year 2025. For taxpayers affected by those federal provisions — including some individuals with business or pass-through income — additional Michigan adjustments may be required.

The good news is that our tax software automatically applies Michigan’s current tax rules when preparing your state return, so you don’t have to calculate these differences yourself.

For more information, visit the Michigan Department of Treasury. If you’d like to learn more about recent federal tax law changes, see our OBBB tax changes guide.

The bottom line

Michigan has a flat state income tax rate, with personal exemption allowances and additional subtractions and credits for retirees, homeowners, and renters. If you live or work in certain Michigan cities, you may also owe local income tax on top of the state rate.

When you’re ready to file, TaxAct can help you prepare your federal and Michigan returns in one place so you can file with confidence.

Already filed your taxes and waiting for your refund? Learn more about where your Michigan state tax refund is.

This article is for informational purposes only and not legal or financial advice.

All TaxAct offers, products and services are subject to applicable terms and conditions.

The OBBB is now also being referred to by lawmakers as the Working Families Tax Cut Act. You may see one or both names used here, but they refer to the same set of tax changes.

Citations

Michigan Department of Treasury. “Tax Year 2025 Information.” Accessed 10 Aug. 2026.
Michigan Department of Treasury. “2025 Tax Year Income Tax Rate for Individuals and Fiduciaries.” Accessed 10 Aug. 2026.
Michigan Department of Treasury. “Retirement and Pension Benefits.” Accessed 10 Aug. 2026.
Michigan Department of Treasury. “Decoupling Michigan Income Taxes from Certain Internal Revenue Code Provisions.” Accessed 10 Aug. 2026.
TaxAct. “Working Families Tax Cuts Act: 2025 Tax Reform Explained.” TaxAct Blog.
TaxAct. “Where’s My Michigan State Tax Refund?” TaxAct Blog.

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Tags: Filing StatusState TaxesTax DeductionsTax RefundUpdated for tax year 2025

Meghen Ponder: Meghen Ponder is an editorial writer for TaxAct who specializes in writing content about finance and taxes. She enjoys decoding the intricacies of the tax world and helping others answer their tax questions.