Michigan Taxes for Tax Year 2025 (Filed 2026): Income Tax, Sales Tax, Property Tax

 

Michigan taxes for Tax Year 2025 (Filed 2026) are mostly about three things: Michigan’s flat state income tax, the 6% sales and use tax you see at checkout or on out-of-state purchases, and local property taxes, plus Michigan credits that can reduce the cost for eligible homeowners and renters.

Topic What to know for Tax Year 2025 (Filed 2026)
State income tax rate Flat 4.25%
Personal exemption $5,800 per exemption
Michigan return due date April 15, 2026
Sales tax 6% statewide, no local sales tax
Use tax 6% on many taxable items when Michigan tax was not charged
Homestead Property Tax Credit Key limits include a $1,900 credit cap, a $71,500 total household resources limit, and a $165,400 maximum taxable value

 

Michigan State Income Tax

Michigan uses a flat individual income tax rate of 4.25% for Tax Year 2025. Michigan generally starts with your federal adjusted gross income (AGI), then applies Michigan-specific adjustments and exemptions before calculating tax.

 

Michigan Income Tax Basics

Item Amount
Income tax rate 4.25%
Personal exemption amount $5,800

 

Example 1

Federal AGI is $75,000. You claim 1 personal exemption. Ignore other Michigan additions, subtractions, and credits for simplicity.

Step 1: Simplified taxable amount = $75,000 − $5,800 = $69,200

Step 2: Michigan tax = $69,200 × 0.0425 = $2,941.00

This example is intentionally simplified to show how the flat rate and the personal exemption affect the math.

 

Example 2

Federal AGI is $120,000. You claim 4 exemptions total (two spouses plus two dependents). Ignore other adjustments and credits for simplicity.

Step 1: Total exemptions = 4 × $5,800 = $23,200

Step 2: Simplified taxable amount = $120,000 − $23,200 = $96,800

Step 3: Michigan tax = $96,800 × 0.0425 = $4,114.00

 

Michigan Filing Deadline and Extension Rules

The Michigan individual return for Tax Year 2025 is due on April 15, 2026.

If you need more time to file, Michigan’s instructions explain two common paths:

  • If you have a federal extension, you can generally extend the Michigan due date to the new federal due date by submitting the required Michigan extension payment approach described in the instructions.
  • If you do not have a federal extension, Michigan’s instructions reference filing Michigan’s extension application with payment.

Important: An extension to file is not an extension to pay. If you expect to owe, paying by the original due date reduces interest and penalty risk.

 

Example 3

You expect to owe $900 for Tax Year 2025 (Filed 2026) and you cannot finish your return by April 15, 2026.

  • Step 1: Make a reasonable payment toward the expected balance by April 15, 2026.
  • Step 2: Use the extension process described in the Michigan instructions so you can finish the paperwork after the deadline.
  • Step 3: File the completed return and report the extension payment as instructed.

 

Michigan Sales Tax

Michigan’s general sales tax rate is 6% on taxable retail sales. Michigan does not allow city or local units to impose sales tax. Some specific categories, such as certain residential energy items, can be taxed differently, so it is smart to confirm the category if you are budgeting a large purchase.

 

Example 4

You buy a $400 taxable item in Michigan.

Sales tax = $400 × 0.06 = $24.00

Total paid = $400 + $24.00 = $424.00

 

Michigan Use Tax

Use tax is a companion to sales tax. Michigan’s use tax rate is 6% and commonly applies when you buy taxable items from out-of-state sellers who do not collect Michigan sales tax, including many internet, mail, or phone purchases. Michigan also states that credit is given for tax paid to another state.

 

Example 5

You buy a $1,500 taxable item online, shipped into Michigan, and no Michigan tax is charged.

Use tax = $1,500 × 0.06 = $90.00

If you paid sales tax to another state on the same purchase, Michigan rules generally allow a credit in that situation, based on the state’s guidance.

 

Michigan Property Taxes and the Homestead Property Tax Credit

Michigan property taxes are local and vary by location. Even though the property tax bill is local, Michigan offers credits that can reduce the cost for eligible homeowners and renters.

Homestead Property Tax Credit Key Limits

Limit Amount
Maximum taxable value $165,400
Total household resources limit $71,500
Phase-out begins above total household resources $62,500
Credit limit $1,900

 

Example 6

Your home’s taxable value is $150,000 and your total household resources are $60,000.

Step 1: Taxable value check, $150,000 is below the $165,400 maximum taxable value.

Step 2: Total household resources check, $60,000 is at or below the $62,500 phase-out starting point.

In this example, you are inside the basic limits where the phase-out table does not reduce the credit, then you would calculate the credit amount using the Michigan credit form rules and your actual property taxes or eligible rent.

 

Renters: How Michigan Treats Rent for the Credit

For renters, Michigan’s instructions state that in most cases, 23% of rent paid is considered property tax that can be used in the Homestead Property Tax Credit calculation, with specific exceptions for certain housing types.

 

Example 7

You rent and pay $1,200 per month during 2025.

Annual rent = $1,200 × 12 = $14,400

Estimated property taxes from rent = $14,400 × 0.23 = $3,312.00

This gives you a starting number for the credit calculation, then you still apply the credit limits and total household resources rules.

 

Michigan City Income Taxes, Detroit Example

Some Michigan cities impose a local income tax. Detroit is the largest example and has separate resident and nonresident rates.

Detroit city income tax Rate
Resident 2.4%
Nonresident 1.2%

 

Example 8

You are a nonresident of Detroit and have $60,000 of wages subject to Detroit city income tax.

Detroit nonresident tax = $60,000 × 0.012 = $720.00

 

Official Michigan sources

For the official 2025 income tax rate, exemption amounts, and credit limits, see Michigan Treasury Tax Year 2025 Guidance.

For the official sales tax and use tax rules, see Michigan Treasury Sales and Use Taxes.