Asked about Michigan individual income tax for self-employed persons, sole proprietors, or single-member LLCs.
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Michigan flat income tax rate
4.25%MCL 206.51
Personal exemption (per person)
$5,800MCL 206.30
Stillbirth exemption
$5,800MCL 206.30
Special exemption (disabled/deaf/blind)
$3,400MCL 206.30
Disabled veteran exemption
$500MCL 206.30
Senior income deduction — Single (age 67+)
$20,000 against all incomeMCL 206.30
Senior income deduction — MFJ (both age 67+)
$40,000 against all incomeMCL 206.30
Michigan individual income tax filing deadline (TY 2026)
April 15, 2027MCL 206.1 et seq. (Income Tax Act of 1967); Form MI-1040 instructions
Extension period
Automatic 6-month extension with federal extensionMCL 206.1 et seq. (Income Tax Act of 1967); Form MI-1040 instructions
Estimated tax payment threshold (required if liability exceeds)
$500 expected liability after credits and withholdingMCL 206.301; Form MI-1040ES
Estimated tax payment due dates
April 15, June 15, September 15, January 15MCL 206.301; Form MI-1040ES
Number of Michigan cities imposing city income tax
24Michigan City Income Tax Act (MCL 141.501 et seq.); Michigan Department of Treasury city tax list
Detroit resident income tax rate
2.4%Michigan City Income Tax Act (MCL 141.501 et seq.)
Detroit non-resident / worker income tax rate
1.2%Michigan City Income Tax Act (MCL 141.501 et seq.)
Grand Rapids resident income tax rate
1.5%Michigan City Income Tax Act (MCL 141.501 et seq.)
Grand Rapids non-resident / worker income tax rate
0.75%Michigan City Income Tax Act (MCL 141.501 et seq.)
All other Michigan cities — resident income tax rate
1.0%Michigan City Income Tax Act (MCL 141.501 et seq.)
All other Michigan cities — non-resident / worker income tax rate
0.5%Michigan City Income Tax Act (MCL 141.501 et seq.)
Michigan tax formula
Michigan taxable income × 4.25%MCL 206.51
Michigan Earned Income Tax Credit (EITC) — percentage of federal credit
30% of federal Earned Income Credit (refundable)MCL 206.272
Homestead Property Tax Credit — income eligibility threshold
Household income ≤ certain thresholds (see MI-1040CR)MCL 206.520
Credit for taxes paid to other states — type
Non-refundable, limited to Michigan tax on income also taxed by other stateMCL 206.255
Michigan AGI starting point
Federal adjusted gross income (AGI) — Form 1040, Line 11MCL 206.30
Add-back: interest on out-of-state municipal bonds
Add back to Michigan AGIMCL 206.30(1)(d)
Add-back: city income tax deduction claimed on federal Schedule A
Add back to Michigan AGIMCL 206.30
Subtraction: U.S. government bond interest
Subtract from Michigan AGIMCL 206.30(1)(f)
Subtraction: Social Security, military pay, railroad retirement
Fully exempt — subtract from Michigan AGIMCL 206.30(1)(f)
States with Michigan reciprocity agreements
IL, IN, KY, MN, OH, WI — wages earned in those states by MI resident taxed only by MIMCL 206.1 et seq. (Income Tax Act of 1967); Michigan Department of Treasury reciprocity agreements
Estimated tax form
Form MI-1040ESMCL 206.301; Form MI-1040ES
Scope. This skill covers Michigan Form MI-1040 for full-year Michigan residents who are sole proprietors or single-member LLC owners. Michigan imposes a flat 4.25% income tax. This skill also flags city-level income taxes that may apply in 24 Michigan cities.
Quality tier. Q3 — AI-drafted, not independently verified. All rates and thresholds were researched on 2026-05-22 from official Michigan Department of Treasury publications. A qualified professional must review before filing.
Metadata table
| Field | Value |
|---|---|
| Jurisdiction | Michigan (US-MI) |
| Tax type | Individual income tax |
| Primary form | Form MI-1040 |
| Tax year | 2026 (filed in 2027) |
| Authority | Michigan Department of Treasury |
| Statute | MCL 206.1 et seq. (Income Tax Act of 1967) |
| Version | 0.1 |
| Last updated | 2026-05-22 |
| Validation | AI-drafted — Q3 |
Sources consulted table
| # | Source | URL |
|---|---|---|
| 1 | Michigan Treasury — 4.25% Rate Notice for 2026 | https://www.michigan.gov/treasury/reference/taxpayer-notices/2026/04/15/425-income-tax-rate-for-individuals-and-fiduciaries-in-2026-tax-year |
| 2 | MI-1040 Book (TY 2025 instructions) | https://www.michigan.gov/taxes/-/media/Project/Websites/taxes/Forms/IIT/TY2025/MI-1040-Book.pdf |
| 3 | MCL 206.51 — Tax rate | https://legislature.mi.gov/Laws/MCL?objectName=mcl-206-51 |
| 4 | Michigan city income tax list | https://www.michigan.gov/taxes/iit/city |
Michigan flat income tax rate table (MCL 206.51)
| Item | Value | Source |
|---|---|---|
| Michigan flat income tax rate | 4.25% | MCL 206.51 |
Exemptions table (MCL 206.30)
| Item | Amount | Source |
|---|---|---|
| Personal exemption | $5,800 per person | MCL 206.30 |
| Stillbirth exemption | $5,800 | MCL 206.30 |
| Special exemption (disabled/deaf/blind) | $3,400 | MCL 206.30 |
| Disabled veteran exemption | $500 | MCL 206.30 |
Senior deduction table
| Filing status | Deduction |
|---|---|
| Single (age 67+) | $20,000 against all income |
| MFJ (both 67+) | $40,000 against all income |
Key thresholds table
| Item | Value |
|---|---|
| Filing deadline | April 15, 2027 (for TY 2026) |
| Extension | Automatic 6-month with federal extension |
| Estimated tax threshold | $500 expected liability after credits and withholding |
| Estimated payment due dates | April 15, June 15, September 15, January 15 |
24 Michigan cities impose a separate city income tax. The most notable:
City income tax rates table
| City | Resident rate | Non-resident / worker rate |
|---|---|---|
| Detroit | 2.4% | 1.2% |
| Grand Rapids | 1.5% | 0.75% |
| All other cities | 1.0% | 0.5% |
Tier 1 rules table
| Rule ID | Rule | Source |
|---|---|---|
| MI-T1-01 | Start with federal AGI (Form 1040, Line 11) | MCL 206.30 |
| MI-T1-02 | Add back interest on out-of-state municipal bonds | MCL 206.30(1)(d) |
| MI-T1-03 | Add back city income tax deduction claimed on federal Schedule A | MCL 206.30 |
| MI-T1-04 | Subtract U.S. government bond interest | MCL 206.30(1)(f) |
| MI-T1-05 | Subtract Social Security, military pay, railroad retirement (fully exempt) | MCL 206.30(1)(f) |
| MI-T1-06 | Personal exemption: $5,800 per person (2026) | MCL 206.30 |
| MI-T1-07 | Flat rate: taxable income × 4.25% | MCL 206.51 |
| MI-T1-08 | Michigan EITC: 30% of federal Earned Income Credit (refundable) | MCL 206.272 |
| MI-T1-09 | Homestead Property Tax Credit: available to homeowners/renters with household income ≤ certain thresholds (filed on MI-1040CR) | MCL 206.520 |
| MI-T1-10 | Credit for taxes paid to other states: non-refundable, limited to Michigan tax on income also taxed by other state | MCL 206.255 |
Tier 2 rules table
| Rule ID | Rule | Guidance |
|---|---|---|
| MI-T2-01 | Residency determination — Michigan uses a domicile test. A person domiciled in Michigan is a resident for the full year, even if temporarily absent. | If taxpayer has homes in multiple states, flag for professional review. |
| MI-T2-02 | Reciprocal agreements — Michigan has reciprocity with IL, IN, KY, MN, OH, WI. Wages earned in those states by a MI resident are taxed only by MI. | Verify the employer withheld for MI (not the work state) and file exemption certificate. |
| MI-T2-03 | City income tax nexus — If a self-employed person has customers or performs work in a city with city income tax, apportionment rules may apply. | Flag for professional review if the taxpayer works in Detroit, Grand Rapids, or other taxing cities. |
| MI-T2-04 | Retirement/pension income subtraction — Complex rules for taxpayers born before 1946, between 1946–1952, and after 1952. | Apply the correct tier based on birth year. |
| MI-T2-05 | Home heating credit — Income-based credit available to low-income households. | Requires separate computation on MI-1040CR-7. |
Supplier pattern library table
| Pattern | Treatment | Notes |
|---|---|---|
| W-2 wages from Michigan employer | Michigan withholding applies; include on MI-1040 | Most common |
| W-2 wages from reciprocal state (IL, IN, KY, MN, OH, WI) | Should have MI withholding; if not, claim credit | File exemption with employer |
| Schedule C net profit (sole prop) | Flows through federal AGI → Michigan AGI | No separate MI schedule |
| Rental income (Schedule E) | Included in federal AGI → Michigan AGI | Michigan-source if property in MI |
| Interest on U.S. government bonds | Subtract from Michigan AGI | MCL 206.30 |
| Interest on non-Michigan muni bonds | Add back to Michigan AGI | Taxable for MI purposes |
| Social Security benefits | Subtract from Michigan AGI (fully exempt) | MCL 206.30 |
| Capital gains from asset sale | Included in federal AGI → Michigan AGI | No special MI rate |
| 1099-NEC freelance income | Flows through Schedule C → federal AGI | Estimated payments likely needed |
Form mapping table
| Michigan form / schedule | What it covers | Federal counterpart |
|---|---|---|
| Form MI-1040 | Michigan Individual Income Tax Return | Form 1040 |
| Schedule 1 (MI-1040) | Additions and Subtractions | Schedule 1 (Form 1040) |
| Schedule NR | Non-resident / Part-year Resident | N/A |
| Schedule W | Michigan Withholding | W-2/1099 withholding summary |
| MI-1040CR | Homestead Property Tax Credit | N/A |
| MI-1040CR-7 | Home Heating Credit | N/A |
| MI-1040ES | Estimated Tax Payment Voucher | Form 1040-ES |
| City returns (various) | City income tax | N/A |
Refusal catalogue table
| ID | Situation | Action |
|---|---|---|
| MI-R-01 | Part-year or non-resident return (Schedule NR) | Refuse — out of scope |
| MI-R-02 | Corporate income tax (CIT) | Refuse — out of scope |
| MI-R-03 | City income tax return (Detroit, Grand Rapids, etc.) | Refuse — separate filing; out of scope |
| MI-R-04 | Multi-state income apportionment | Refuse — flag for professional review |
| MI-R-05 | Amended returns | Refuse — out of scope |
| MI-R-06 | Tax year other than current | Refuse — rate may differ |
| MI-R-07 | Michigan Business Tax (MBT) or Corporate Income Tax | Refuse — different tax type |
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Other Michigan computations in the OpenAccountants Tax Library.
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