Michigan State Tax Return

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If you lived or worked in Michigan during the year, here’s what you should know about Michigan state taxes.

Who has to file a Michigan tax return?

You must file a Michigan income tax return if:

  • You are a resident of Michigan and have to file a federal tax return.
  • You are a non-resident of Michigan but earned income from a Michigan source, and your total income for the year is more than the Michigan personal exemption allowance.
  • You are a part-year resident of Michigan, which means you moved into or out of Michigan during the tax year.

Does Michigan tax retirement income?

In Michigan, retirement income, including Social Security benefits, is generally exempt from state income tax.

However, some types of retirement income, such as pensions and annuities, may be partially or fully taxed. It’s important to note that Michigan does not tax IRA or 401(k) withdrawals.

How much is Michigan income tax?

Michigan’s income tax system has a flat tax rate of 4.25%, which applies to all taxpayers regardless of income level. There are no tax brackets in Michigan.

When are Michigan tax returns due?

Michigan tax returns are due on April 15th, which is the same as the federal tax filing deadline. If the 15th falls on a weekend or holiday, the deadline is extended to the next business day.

What happens if you don’t file?

If you don’t file your Michigan tax return by the deadline, you may be subject to penalties and interest. The penalty for failing to file is 5% of the tax owed per month, up to a maximum of 25%. Interest is also charged on any unpaid tax.

Common Michigan Tax Credits and Deductions

Some common deductions and credits for Michigan taxes include:

  • Homestead Property Tax Credit: This credit is available to homeowners with a household income below a certain level. The credit is based on property taxes paid and is refundable.
  • Michigan Earned Income Tax Credit (EITC): Michigan offers an EITC for low to moderate-income taxpayers. The credit is based on your federal EITC and ranges from 6% to 20% of the federal credit amount.
  • Michigan Standard Deduction: Michigan offers a standard deduction for taxpayers who do not itemize their deductions on their federal tax return. For 2022, the standard deduction is $4,900 for single filers and $9,800 for married couples filing jointly.
  • Charitable Contributions: Michigan taxpayers may deduct contributions made to certain charitable organizations from their state taxable income. The deduction is limited to $10,000 for individuals and $20,000 for married couples filing jointly.

It’s important to note that this is just a brief overview of Michigan’s state income tax system, and there may be additional rules and regulations that apply to your specific situation. It’s always a good idea to consult with a tax professional or use tax preparation software to ensure that you’re meeting all of your state tax obligations.

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