Michigan Income Tax Rates 2026: Flat 4.25%, No Brackets

You are probably here for one number, so here it is: the Michigan income tax rate is a flat 4.25% for tax year 2026. There are no brackets, no bands, and no rate that climbs as you earn more. Whether you make $30,000 or $300,000, the state takes the same percentage.

The rate is the easy part. What actually decides your bill is what you subtract before that 4.25% is applied — and, if you live or work in Grand Rapids or one of about two dozen other Michigan cities, what gets added on top. Below are the Michigan income tax rates for 2026 and the six years before it, the exemptions that go with them, and the two rule changes for 2026 that catch people out.

Michigan income tax rate for 2026

For tax year 2026, the Michigan income tax rate is 4.25%. It applies to every individual filer at every income level, and it does not change with filing status — single, married filing jointly and head of household all pay the same percentage on the same taxable income.

The Michigan Department of Treasury confirmed the 2026 rate in a notice issued on April 15, 2026. The rate is not simply nailed to 4.25% by statute: since 2023, Michigan law has carried a formula that can push it down for a single year when the state's general fund grows faster than inflation. For 2026 it did not apply. General fund revenue for fiscal year 2025 fell by 1.56% while inflation ran at 2.70%, so the reduction was never triggered and the rate held at 4.25%.

One thing to be clear about before going further: 4.25% is the state rate. It is not the whole picture for anyone who lives or works in a Michigan city that levies its own income tax, and it has nothing to do with what you owe the IRS.

Does Michigan have income tax brackets?

No. Michigan is a flat-tax state and does not have income tax brackets — and it is not free to adopt them. Article IX, Section 7 of the Michigan Constitution states plainly that "no income tax graduated as to rate or base shall be imposed by the state or any of its subdivisions." Brackets would take a constitutional amendment, not a bill.

The distinction is worth being precise about. A graduated system — the federal one, and most other states — slices your income into bands and taxes each band at a rising rate. Michigan slices nothing. One rate, 4.25%, applied to all of your Michigan taxable income.

So if you are searching for Michigan tax brackets, one of two things is usually true. Either you are thinking of the federal brackets, which do apply to the same income on a separate return, or you have landed on a page showing federal brackets under a Michigan heading — which is easy to do. More than one accounting firm currently ranks for "Michigan tax brackets" on a page that lists the federal 10%–37% bands and never states Michigan's rate anywhere on it.

The practical consequence of a flat rate is that the usual bracket-management moves do not touch your Michigan bill. Deferring income into next year, or splitting it across two years, will not drop you into a lower Michigan band, because there is no lower band to drop into. What does move the number is the size of your Michigan taxable income — which is where exemptions come in.

Michigan income tax rates by year

Michigan's rate has been 4.25% for most of the last decade, with a single exception. These figures come from the Department of Treasury's own year-by-year schedule.

The 2023 figure is the one people ask about. That year the rate dropped to 4.05%, and plenty of Michigan taxpayers assumed a tax cut had been passed. It had not. The drop came from the formula described above: state law requires the State Treasurer and the directors of the House and Senate Fiscal Agencies to compare the previous year's general fund growth against inflation, and if revenue outran inflation, the rate falls for that year only. Fiscal 2022 met the test, the 2023 rate fell, and when the condition was not met again the rate returned to 4.25% for 2024. It has stayed there since.

Notice the third column, though. The personal exemption has risen every single year in that table, from $4,750 to $5,900. For a typical Michigan family, those increases have quietly done more to the final bill than the rate has.

Exemptions and what you actually pay tax on

The 4.25% is applied to your Michigan taxable income — not your gross pay, and not your federal taxable income either. Michigan starts from your federal adjusted gross income, applies its own additions and subtractions, then takes off your exemptions. Whatever survives that is what gets taxed.

The Michigan personal exemption for tax year 2026 is $5,900 per person. You claim it for yourself, for a spouse on a joint return, and for each dependent. A married couple with two children therefore removes $23,600 from the base before the rate touches anything — worth just over $1,000 of Michigan tax on its own.

There are several other exemptions on top of the personal one:

Those are deliberately labelled as the 2025 amounts. Treasury confirms the personal exemption well ahead of the year, but publishes the rest of the schedule later, so at the time of writing the 2026 figures for the special, disabled-veteran and stillbirth exemptions were not yet posted. Use them as a guide to the shape of the return, not as 2026 numbers, and check before you file.

Two larger subtractions never appear on a rate table at all but change the base substantially: Michigan's retirement and pension subtraction, which is being phased back in over several years and depends on your year of birth, and the state's earned income tax credit. Neither is a rate change, and both are easy to leave on the table.

Working out what you owe at the Michigan income tax rate

Here is the arithmetic on a return shaped like a real one.

Dave runs a two-van plumbing business out of Wyoming, MI. He and his wife file jointly, they have two children, and after business expenses their federal adjusted gross income for 2026 is $95,000. Neither of them works inside a city that levies an income tax.

That works out to about 3.2% of their income, not 4.25% — because the exemptions come off first. It is also why two households on identical income can owe visibly different amounts of Michigan tax, even though the Michigan income tax rate applied to both is exactly the same. The rate never varies. The base always does.

Change one fact and the number moves. If Dave lived inside Grand Rapids city limits, he would add Grand Rapids resident tax on top of that $3,034.50. If he lived in Wyoming but worked at a site in Grand Rapids, he would owe the city's non-resident rate on the income he earned there — which is the section below.

If you would rather run your own figures than follow someone else's, our Michigan income tax calculator does this calculation and adds Grand Rapids or Walker city tax on top.

Michigan cities that charge their own income tax

The Michigan income tax rate is not the only one some people pay. Michigan is one of the few states where cities may levy an income tax of their own on top of the state's, and about two dozen do — Treasury counted 24 as of 2021. If you live or work in one, 4.25% is not your whole income tax picture.

Two matter most around Grand Rapids:

The pattern in that table holds across the state: non-residents pay half the resident rate, and they pay it only on income earned inside the city. That catches people out in both directions. Live in Grandville and drive into Grand Rapids for work, and you owe Grand Rapids the non-resident rate on those wages despite never having lived there. Live in the city and work outside it, and you owe the resident rate on all of your income regardless.

City returns are separate filings with their own forms and their own deadlines — they are not part of your MI-1040. Our Michigan tax deadlines and forms page has the current dates and direct links.

What changed for 2025 and 2026

Two changes are worth knowing about, because neither shows up on a rate table and both change what you actually owe. Both came from Public Act 24 of 2025, signed on October 7, 2025.

Tips and overtime: Michigan starts a year behind the federal deduction

The federal One Big Beautiful Bill Act created new deductions for qualified tips and qualified overtime pay. Michigan chose to follow — but not on the same schedule. The federal deduction is available from tax year 2025. Michigan's version does not begin until tax year 2026, and runs through 2028.

That one-year gap is the trap. If you earned tips or overtime during 2025 and deducted them on your federal return, the same deduction was not available on your 2025 Michigan return. From 2026 it is. If you are a non-resident, you can deduct only the tips and overtime earned for work performed in Michigan.

Michigan no longer follows the federal rules on equipment write-offs

The same act decoupled Michigan from several federal provisions for tax years beginning after December 31, 2024. In plain terms: you can write off the full cost of a truck, a trailer or a machine on your federal return and still have to add most of it back on your Michigan return.

The federal Section 179 limit rose to $2.5 million; Michigan still applies the older $1.25 million limit. Federal bonus depreciation returned to 100%; Michigan uses the pre-2025 phase-down, which was 40% for tax year 2025. The difference between the two becomes an addition on your Michigan return, and from that point you carry a separate Michigan depreciation schedule for the asset.

If you have bought equipment in the last two years, this is worth a conversation. It is exactly the sort of difference that does not surface until the return is being prepared — and it is a large part of what individual tax preparation in Grand Rapids actually involves once a business is in the picture.

FAQ

What is the Michigan income tax rate for 2026?

Michigan's income tax rate is a flat 4.25% for tax year 2026. It applies to every filer at every income level and does not change with filing status. The Michigan Department of Treasury confirmed the rate in a notice issued on April 15, 2026.

Does Michigan have tax brackets?

No. Michigan is a flat-tax state with a single rate of 4.25%, so there are no income bands and no rate that rises as you earn more. The Michigan Constitution prohibits a graduated income tax outright, so brackets would require a constitutional amendment. Bracket tables you find for Michigan are almost always the federal brackets, which apply to the same income on a separate return.

What is the Michigan personal exemption for 2026?

The Michigan personal exemption is $5,900 per person for tax year 2026, up from $5,800 in 2025. You claim it for yourself, for a spouse on a joint return and for each dependent, and it is subtracted before the 4.25% rate is applied.

Why was the Michigan income tax rate 4.05% in 2023?

Michigan law contains a formula that lowers the rate for a single year when general fund revenue grows faster than inflation. That condition was met once, which reduced the 2023 rate to 4.05%. It was not met again, so the rate returned to 4.25% for 2024 and has remained there through 2026.

Do I pay city income tax as well as Michigan income tax?

You do if you live or work in one of the roughly two dozen Michigan cities that levy one. Grand Rapids charges 1.5% for residents and 0.75% for non-residents on income earned in the city; Walker charges 1% and 0.5%. City returns are filed separately from your MI-1040 and have their own deadlines.

Is Michigan a flat tax state?

Yes. Michigan taxes income at a single flat rate, which is 4.25% for 2026, and Article IX of the Michigan Constitution bars the state and its subdivisions from imposing a graduated income tax. The rate has moved only once in recent years, to 4.05% for 2023, and that came from a statutory formula rather than new legislation.