Michigan Income Tax Calculator 2026

Michigan’s 4.25% flat tax and the personal exemption

Michigan taxes income at 4.25% for 2026. You start from federal AGI, make Michigan additions and subtractions on Schedule 1, then subtract $5,900 for each exemption. There is no general standard deduction, so the exemption does the work: a family of four shelters $23,600 of income.

Worked example: a married couple with two children and $90,000 of wages has $66,400 of taxable income after four exemptions, and Michigan tax of $2,822, about 3.14% of gross pay. If they live in one of the cities with an income tax, a separate city tax is due on top.

Retirement income: the repeal is complete in 2026

Social Security benefits are exempt from Michigan income tax for filers of all ages.

For other retirement income, Michigan phased out the age-based limits introduced in 2012. Under the 2023 Lowering MI Costs Plan the subtraction was phased in at 25% for 2023, 50% for 2024 and 75% for 2025, and it reaches 100% for tax year 2026 regardless of birth year. The cap is based on Michigan’s private pension limit, which is indexed each year. Qualifying benefits include most income reported on Form 1099-R, such as defined benefit pensions, IRA distributions and most defined contribution plan payouts; deferred compensation generally does not qualify.

Public Act 24 of 2025 also lets taxpayers born after 1952 who are 67 or older claim both the Michigan standard deduction for seniors and the Social Security deduction for tax years 2026 to 2028, without reducing one by the other. In Treasury’s example, a single 73-year-old with $23,000 of wages, $5,000 of retirement income and $12,000 of Social Security has taxable income of $8,000 instead of $20,000.

Michigan credits

The Homestead Property Tax Credit is the Michigan credit most households check first, and its limits are strict.

• Homestead Property Tax Credit (Form MI-1040CR): for homeowners and renters; for 2025 the maximum credit is $1,900, it is reduced by 10% for every $1,000 of total household resources above $62,500, and no credit is allowed above $71,500 or if the home’s taxable value exceeds $165,400.
• If you file an MI-1040, include the credit claim with it by the April deadline; a claim for the 2025 credit can still be filed until April 15, 2030.
• Separate homestead credit rules (MI-1040CR-2) for qualifying veterans and blind people.

Filing, residency and city returns

The 2026 MI-1040 is due April 15, 2027. Michigan taxes residents on all compensation wherever it is earned, and nonresidents only on pay for work done in Michigan. Part-year residents are taxed on income earned while they lived in Michigan. Residents of Illinois, Indiana, Kentucky, Minnesota, Ohio and Wisconsin are not subject to Michigan tax on wages earned in Michigan.

Moving changes the answer. In Treasury’s own example, a Michigan resident who moves to Kentucky halfway through the year and keeps working remotely for the same Michigan employer is taxed by Michigan on only half of that year’s wages.