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Michigan Personal Income Tax Laws

Even if we know we have a big return coming, filing our income taxes every year can be a pain. And maybe you’re a little jealous of the folks that live in those “no state income tax” locales. So how do the Great Lakes State’s tax laws compare to other states? And how do those laws work with the federal income tax statutes? This article is a brief overview of Illinois personal income tax laws.

Income Tax in Michigan

The majority of states collect income tax from their residents to help pay for education, roads, and other vital state services. Michigan personal income tax laws levy a 4.25 percent rate on all taxable income, with a personal exemption amount of $4,000. However, some corporations, partnerships, and trusts could have to pay additional taxes on their income. The following chart details the main provisions of Michigan's personal income tax laws.

Code Section


Who is Required to File

Individuals, estates, and trusts; Each person with business activity in Michigan allocated or apportioned to Michigan is subject to the single business tax; Partnerships and S corporations are not taxable


4.25% of taxable income

Federal Income Tax Deductible


Federal Income Used as Basis


These Michigan income taxes coexist with consumer tax laws as well as federal tax laws. Under basic tax law, both the federal government and the state may tax both unearned and earned income. Earned income refers to your salary, wages, tips, commissions, bonuses, unemployment benefits, and sick pay. Unearned income comes from things like interest, dividends, profits from asset sales, business and farm income, rent income, royalties, gambling winnings, and alimony.

Federal taxation is handled by the Internal Revenue Service (IRS) and is collected according to the Internal Revenue Code (IRC). You can find IRS forms and publications are available online. While many state income tax codes are similar to the federal code, there might be important distinctions in each state that you should understand before paying your taxes. Most states also offer taxpayer assistance programs for those who would like help filing their state and federal income tax returns, as well as making their state tax forms available online.

Michigan Personal Income Tax Laws: Related Resources

Navigating tax law is never easy. You can visit FindLaw’s Tax Law center for additional articles and resources. You can also contact a Michigan tax law attorney if you would like legal assistance with your tax case.

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