What is the Michigan state income tax rate for 2025?

Michigan has a flat income tax rate of 4.25% for 2025. Everyone pays the same percentage regardless of income level. This rate is protected by the Michigan Constitution, making it very stable and predictable. Michigan does not allow any local city or county income taxes.

Are there local income taxes in Michigan cities?

No! Michigan does not allow cities or counties to levy local income taxes. The 4.25% state rate is all you pay, whether you live in Detroit, Grand Rapids, Ann Arbor, or anywhere else in Michigan. This is a major advantage over states like Ohio where cities can add 1-3% local tax.

Can Michigan's income tax rate change?

Michigan's 4.25% flat tax rate is protected by the state constitution (Article 9, Section 7). Changing it requires a constitutional amendment, which needs a statewide vote. This makes Michigan's tax rate highly stable and predictable compared to states where the legislature can change rates annually.

How does Michigan tax compare to neighboring states?

Michigan (4.25% flat) is mid-range among neighbors. Ohio has lower rates (0% to 3.125% but with city taxes), Indiana is lower (3.0% flat plus county tax), Illinois is higher (4.95% flat), and Wisconsin is much higher (progressive up to 7.65%). Michigan's advantage is simplicity and no local taxes.

Does Michigan tax Social Security or retirement income?

Michigan does not tax Social Security benefits. For other retirement income, it depends on your age: Born before 1946 get full exemption on pensions; born 1946-1952 get partial exemptions; born after 1952 get standard deduction ($20,000 single / $40,000 married) but no special pension exemption. Michigan taxes 401k/IRA withdrawals.

What's the best free tax software for Michigan?

Cash App Taxes is completely free for both federal and Michigan state returns. FreeTaxUSA charges $0 for federal and $14.99 for Michigan state. Both handle Michigan's simple flat tax easily. For income under $64,000, the IRS VITA program offers free in-person tax preparation.

How much Michigan state tax will I pay on $75,000 income?

On $75,000 of taxable income in Michigan for 2025: $75,000 × 4.25% = $3,188. That's your Michigan state tax. Effective rate is exactly 4.25%. Michigan offers a standard personal exemption of $5,600 (or $12,100 if married), which reduces your taxable income slightly.

What are Michigan's standard deductions for 2025?

Michigan offers a personal exemption of $5,600 for single filers and $12,100 for married filing jointly (2025). This is different from the federal standard deduction. Michigan also allows a $600 exemption per dependent. These reduce your taxable income before applying the 4.25% rate.

Michigan Income Tax Calculator 2025 - MI State Tax Rate (4.25% Flat)

Calculate Your Michigan State Tax

Annual Income ($)

Filing Status

Number of Dependents $600 exemption per dependent

Gross Income: $0

Personal Exemption: $0

Dependent Exemptions: $0

Taxable Income: $0

Michigan State Tax (4.25%): $0

Effective Tax Rate: 0%

After-Tax Income: $0

Michigan Income Tax Rate for 2025

Michigan has a 4.25% flat income tax rate that applies to all income levels. This rate is protected by the Michigan Constitution (Article 9, Section 7), which means it cannot be changed by the legislature alone—it requires a constitutional amendment approved by voters.

                    🎯 Constitutional Protection: Michigan's 4.25% flat tax is locked into the state constitution. This provides exceptional stability and predictability for taxpayers and businesses. Unlike states where rates change frequently based on legislative whims, Michigan's rate has been stable for years.
                

                    🏙️ No Local Income Taxes: Michigan does NOT allow cities or counties to levy local income taxes. Whether you live in Detroit, Grand Rapids, Ann Arbor, Lansing, or a small town, you only pay the 4.25% state rate. This is a huge advantage over Ohio (cities add 1-3%), New York (NYC adds 3-4%), and other states with local taxes.
                

Real Example: $75,000 Income

Single Filer, No Dependents:

Gross Income: $75,000
Personal Exemption: -$5,600
Taxable Income: $69,400
Tax: $69,400 × 4.25% = $2,950
Effective Rate: 3.93%

Married Filing Jointly, 2 Kids:

Gross Income: $75,000
Personal Exemption: -$12,100
Dependent Exemptions: -$1,200 (2 × $600)
Taxable Income: $61,700
Tax: $61,700 × 4.25% = $2,622
Effective Rate: 3.50%

How Michigan Compares to Other States

State	Tax System	Tax on $75k	vs Michigan
Michigan	4.25% flat	$2,950	—
Ohio	Progressive (0%, 2.75%, 3.125%)	$1,346 (state only)	OH saves $1,604
Ohio (Columbus)	+ 2.5% city tax	$3,221 (state + city)	MI saves $271
Indiana	3.0% flat (+ county tax)	$2,250 + county	IN saves $700+
Illinois	4.95% flat	$3,713	MI saves $763
Wisconsin	Progressive (up to 7.65%)	~$4,200	MI saves $1,250
Pennsylvania	3.07% flat	$2,303	PA saves $647

                    💡 Key Insight: Michigan is mid-range compared to neighbors. Ohio and Pennsylvania have lower state rates, BUT Ohio cities add 1-3% local tax. Pennsylvania has no local tax and is generally lower. Indiana is cheaper (3%) but adds county tax. Illinois and Wisconsin are notably higher than Michigan.
                

Michigan Retirement Income Rules

Michigan's retirement income taxation depends on when you were born:

Born Before 1946

Social Security: 100% tax-free
Public Pensions: 100% tax-free (no limit)
Private Pensions: 100% tax-free (no limit)
401k/IRA: Fully exempt

Result: If you were born before 1946, Michigan doesn't tax ANY retirement income!

Born 1946-1952

                    Social Security: 100% tax-free
Pensions: Partial exemption ($20,000 single / $40,000 married)
401k/IRA: Taxed at 4.25% (after exemption)

                

Born After 1952

                    Social Security: 100% tax-free
Pensions, 401k, IRA: Standard deduction only ($20,000 single / $40,000 married at age 67+)
No special pension exemption—treated like regular income

                

🏖️ Retirement-Friendly? Michigan is moderately retirement-friendly. If you were born before 1946, it's excellent (no tax on retirement income). If you were born after 1952, it's just okay—better than many states but not as generous as Pennsylvania (no tax on any retirement income) or Florida (no income tax at all).

Best Places to Live in Michigan (By Income Level)

For Income $30,000 - $50,000

Recommended Cities: Kalamazoo, Lansing, Saginaw, Flint suburbs

Why: Low cost of living, affordable housing ($700-$1,100/month for 2BR), no city income tax

Tax Impact: ~3.5% effective state rate after exemptions

For Income $50,000 - $80,000

Recommended Areas: Grand Rapids, Ann Arbor suburbs, Royal Oak, Novi

Why: Great amenities, good schools, no city tax, vibrant communities

Tax Impact: ~3.8-4.0% effective state rate

For Income $80,000 - $150,000

Recommended Areas: Birmingham, Northville, Rochester Hills, Plymouth

Why: Top-rated schools, safe neighborhoods, excellent infrastructure

Tax Impact: ~4.1-4.2% effective state rate

For Income $150,000+

Recommended Areas: Bloomfield Hills, Grosse Pointe, Ann Arbor

Why: Premium neighborhoods, best schools in state, high property values

Tax Impact: ~4.25% effective state rate (full rate)

When Moving to Michigan Makes Sense

                    ✅ Move to Michigan if:
                    You're moving from Illinois (4.95%), Wisconsin (up to 7.65%), or other higher-tax Midwest states
You value tax stability (constitutional protection means rates won't change unexpectedly)
You want to avoid local city income taxes (none in Michigan)
You were born before 1946 and retiring (no tax on retirement income!)
You work in auto/manufacturing industries (strong job market)
You prefer Midwest lifestyle with reasonable taxes

                

                    ⚠️ Think Carefully if:
                    You're moving from Pennsylvania (3.07%), Ohio (state only), or Indiana (3.0%)—they're lower
You're moving from no-tax states (FL, TN, TX)—you'll pay 4.25% more
You're born after 1952 with significant retirement income (limited exemptions)
You prioritize lowest possible taxes (MI is mid-range)

                

Affordable Tax Filing Resources for Michigan

Michigan's flat 4.25% tax is simple enough to file yourself with free or budget software:

Cash App Taxes - FREE for federal and Michigan state
Completely free. Perfect for Michigan's simple flat tax. Handles personal exemptions and dependent credits automatically.

Try Cash App Taxes →
FreeTaxUSA - $0 federal, $14.99 Michigan state
Clean interface, excellent for simple Michigan returns. Handles retirement exemptions well.

Try FreeTaxUSA →
IRS Free File - FREE (income under $79,000)
Completely free federal and state filing through IRS partners if income is under $79,000.
VITA - FREE (income under $64,000)
IRS-certified volunteers provide free in-person tax prep. Find locations at IRS Free Tax Prep.
Local Enrolled Agent - $150-$400
For complex situations (retirement exemptions, multiple states), hire a local EA.

Frequently Asked Questions

Can Michigan's 4.25% rate change?

Only through a constitutional amendment approved by voters. The Michigan legislature cannot change it unilaterally, providing exceptional stability.

Does Michigan tax Social Security?

No, Michigan does not tax Social Security benefits at all, regardless of your age or income level.

Are there local income taxes in Detroit?

No! Detroit does not have a local income tax (unlike many other major cities). You only pay the 4.25% state rate.

What if I moved to Michigan mid-year?

You'll be a part-year resident and only pay Michigan tax on income earned while living in Michigan. You'll file returns in both states.

How does Michigan tax remote workers?

If you're a Michigan resident working remotely for a company in another state, you pay Michigan tax (4.25%) on that income. You may get a credit for taxes paid to other states.

Do I need to pay estimated taxes in Michigan?

If you're self-employed or have significant non-W2 income and expect to owe more than $500, yes. Use Michigan form MI-1040ES for quarterly payments.

State rankings: Lowest Tax States 2025 | Best States for Retirees | States with Flat Tax | Highest Tax States 2025

Related Resources

Ohio Tax Calculator - Compare MI vs OH
Illinois Tax Calculator - Compare MI vs IL (4.95% flat)
Pennsylvania Tax Calculator - Compare MI vs PA (3.07% flat)
All State Tax Calculators - Compare Michigan to all 50 states
States With Flat Tax - All flat-tax states like Michigan

📊 Data Sources: All tax rates verified from Michigan Department of Treasury. Tax rates and exemptions are accurate for tax year 2025. Last updated: November 2025.