Michigan state tax: Overview
Michigan's median property tax rate is relatively high, and fuel taxes are high compared to other states.
The Great Lakes State currently has a flat state income tax of 4.25%, but municipalities add their own taxes. Sales taxes in Michigan are relatively low.
In the News: Michigan tax credit checks (referred to by some as Michigan stimulus checks), were sent to more than 700,000 families since the state’s expanded working families tax credit became effective. These rebate checks are separate from any Michigan state tax refund residents receive for the 2023 tax year. For more information, see Michigan Tax Credit Checks 2024.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
[Data for this state tax guide was gathered from a number of sources including the U.S. Census Bureau, the state’s government website, and the Sales Tax Handbook. Property taxes are cited as a rate percentage rather than the assessed value.]
Michigan income tax rate 2024
For 2023, Michigan reduced its flat individual income tax rate from 4.25% to 4.05%. For 2024, however, the Michigan flat individual income tax rate returns to 4.25%.
The reduction was due to a state law that automatically reduces the income tax rate based on the relationship between revenue growth and inflation rates.
- Social Security: Not taxable
- Pensions: Partially taxable (Military pensions are tax-exempt)
- 401(k) and IRA Distributions: Partially taxable
- Military pensions and Railroad Retirement benefits are exempt in Michigan.
Michigan sales tax
Michigan's sales tax rate is 6%. There are no local taxes.
- Groceries: Exempt, but prepared food is taxable
- Clothing: Taxable
- Motor Vehicles: Taxable
- Prescription Drugs: Exempt
How much is property tax in Michigan?
In Michigan, the property tax rate paid as a percentage of assessed value is 1.38% according to the Tax Foundation.
Michigan gas tax
| Product | Tax |
|---|---|
| Gasoline | $0.19 per gallon |
| Disel | $0.15 per gallon |
Source: The Sales Tax Handbook
Michigan taxes on alcohol and tobacco
Michigan tobacco taxes
| Product | Tax |
|---|---|
| Cigarettes | $2 per pack |
| Other Tobacco Products | 32% of wholesale price |
| Medical Marijuana | 6% |
| Recreational Marijuana | 16% (cannabis sales tax plus 10% state excise tax) |
Michigan alcohol taxes
| Product | Tax |
|---|---|
| Beer | $0.20 per gallon |
| Wine | $0.51 per gallon ($0.76 if above 16% alcohol by volume) |
| Liquor | state controlled |
Source: The Sales Tax Handbook
Michigan estate and inheritance taxes
Michigan has no estate or inheritance tax.
Related Content
-
Average Net Worth by Age: How Do You Measure Up?Financial advisors discuss the secrets to growing your net worth over time.
-
Three Charitable Giving Strategies for High-Net-Worth IndividualsIf you have $1 million or more saved for retirement, these charitable giving strategies can help you give efficiently and save on taxes.
-
New Mexico Small Business Saturday Tax Holiday 2024Tax Holiday Here's how you can save on taxes during New Mexico’s Small Business Saturday.
-
Black Friday: Tax Saving Tips to Know Before You ShopTax Deductions Before hitting the sales, businesses should know these key deductions and look out for overspending.
-
Tax Credit vs. Tax Deduction: What’s the Difference?Tax Breaks Your guide to tax deductions and credits, how the IRS treats them differently, and how they impact your tax bill.
-
Premium Tax Credit: Are You Eligible For This Health Insurance Tax Break?Tax Credits The tax credit can help qualifying individuals pay for coverage from the Affordable Care Act’s health insurance marketplace.
-
FSA Contribution Limits Are Higher for 2025FSA A flexible spending account allows you to build tax-free savings for certain medical expenses.
-
Florida Tax Deadline Extension: What You Need to KnowTax Relief The IRS extended federal tax return file time due to severe storms.
-
IRS: Here’s How to Recover Your Tax Records After a Natural DisasterTax Records Your tax documents can help you get federal relief faster, the IRS says.
-
Voters Approve New Veteran Property Tax ReliefTax Relief Thanks to the election, some Veterans will soon see expanded property tax exemptions.
