Michigan — Personal Income Tax

Michigan imposes a personal income tax on residents, part-year residents, and nonresidents with Michigan-source income. The tax is administered under the Income Tax Act of 1967, Act 281, compiled in Michigan Compiled Laws (MCL) Chapter 206.

## Residents

A Michigan resident is an individual whose permanent home is in Michigan. You must file a Michigan return if Michigan income tax was withheld from your earnings and your taxable income is less than your personal exemption allowance, or if your adjusted gross income exceeds your exemption allowance.

Source: Michigan Department of Treasury — Individual Income Tax Filing Requirements FAQ

A temporary absence from Michigan, such as spending the winter in another state, does not make a person a part-year resident for tax purposes.

Source: 2025 Michigan Individual Income Tax MI-1040 Instructions, p. 10–11

For tax year 2025, the personal and stillbirth exemption allowances are $5,800 each, and the Michigan income tax rate is 4.25%.

Source: 2025 Michigan Individual Income Tax MI-1040 Instructions, p. 3

## Part-Year Residents

A part-year resident is a person who moved into or out of Michigan during the tax year. Part-year residents must file a Michigan income tax return and pay Michigan income tax on income earned, received, or accrued while living in Michigan.

Source: 2025 Michigan Individual Income Tax MI-1040 Instructions, p. 10

## Nonresidents

A nonresident is a person whose permanent home for the entire year was in another state. Nonresidents must file a Michigan return if they have Michigan-source income.

For a nonresident individual, estate, or trust, all taxable income is allocated to Michigan to the extent it is earned, received, or acquired from personal services performed in Michigan; as a distributive share of business net profits from work done, services rendered, or other business activities conducted in Michigan; as Michigan lottery winnings; or as casino or pari-mutuel wagering winnings paid by a Michigan casino or licensed race meeting.

Source: MCL § 206.110(2)

## Filing Even When No Tax Is Owed

A return may still be required to be filed even if no tax is ultimately owed, in order to report Michigan-source income or to claim a refund of taxes withheld.

Source: Michigan Department of Treasury — Individual Income Tax Filing Requirements FAQ

## Married Filing Status

Taxpayers who are husband and wife and who file a joint federal income tax return pursuant to the Internal Revenue Code must file a joint Michigan return. If Head of Household or Qualifying Surviving Spouse was used on the federal return, the Michigan return must be filed as Single.

Source: MCL § 206.311(3)

The standard deadline for filing a Michigan individual income tax return is April 15 following the close of the tax year. Fiscal year filers use the same due dates as their federal return.

Source: 2025 Michigan Individual Income Tax MI-1040 Instructions, p. 3

Michigan imposes a 4.25% tax on the taxable income of individuals and other persons subject to the personal income tax. This rate has applied since October 1, 2012, and remains in effect for the 2026 tax year. The statute includes a potential formulaic rate reduction mechanism for tax years beginning on or after January 1, 2023, if general fund revenue growth exceeds inflation, but the conditions for reduction were not met for the 2026 tax year.

Source: MCL § 206.51; Michigan Department of Treasury — 2026 Tax Year Rate Notice

As of June 2026, the core statutes (MCL § 206.30(1)) and Michigan Treasury publication governing calculation of Michigan taxable income for individuals have not materially changed since the prior update. Standard calculation starts with federal AGI and applies statutory additions/subtractions, and Public Act 24 of 2025 remains in effect (with Treasury-confirmed subtractions for qualified overtime and tips in tax years 2026–2028). All published guidance confirms the continuing applicability of the overtime/tips subtractions and ongoing statutory additions/subtractions.

We rechecked:

• MCL § 206.30(1) — statute unchanged since the last update, other than PA 24 of 2025, which is already reflected in the section
• Michigan Treasury Notice (2026–2028 overtime/tips subtractions) — Treasury notice remains current, no superseding guidance issued as of June 2026

No further legislative or administrative changes affecting the standard Michigan taxable income calculation or the PA 24/2025–2028 deductions were enacted or proposed. Section remains accurate as drafted through June 2026.

For tax year 2026, Michigan taxpayers may claim a personal exemption of $5,900 per qualifying individual—including the taxpayer, spouse (if filing separately and the spouse has no income and is not a dependent of another), and each dependent. This amount is subtracted from federal adjusted gross income in determining Michigan taxable income. The personal exemption is indexed annually for inflation by statute (Consumer Price Index) and includes a permanent $600 adjustment for tax years 2022 and after, per MCL § 206.30(7).

Special Exemptions (2026 figures): As of the most recently published Department of Treasury guidance, additional exemptions of $3,400 remain available for each qualifying condition of blindness, deafness, disability, age 65 or over, qualified disabled veteran status, or for the stillbirth exemption (with certificate), as detailed in the 2026 Withholding Guide. A taxpayer may not claim more than one personal exemption for themselves, but may claim both a personal and a special exemption if eligible for a special condition. Documentation requirements are summarized in the MI-1040 instructions and Withholding Guide.

These amounts reflect statutory authority and the Michigan Department of Treasury’s published 2026 inflation-adjusted exemption values. Future annual adjustments will continue per MCL § 206.30(2) and (7).

Source: MCL § 206.30; Michigan Department of Treasury — 2026 Withholding Guide, p. 1

Michigan allows a subtraction from adjusted gross income for qualified retirement and pension benefits, subject to dollar limitations that vary by birth year and filing status. Public Act 4 of 2023 (PA 4) amended MCL § 206.30 to phase out the three-tier birth-year system over four years (2023–2026), with the phase-in completed for the 2026 tax year. The subtraction is authorized under MCL § 206.30(1)(f) and governed by subsections (9), (10), and (11).

## Unified Cap for 2026 and Later

For tax years beginning on or after January 1, 2026, MCL § 206.30(10) permits taxpayers to elect to deduct combined public and private retirement benefits up to the inflation-adjusted private retirement maximum established under MCL § 206.30(1)(f)(iv). For the 2026 tax year, Revenue Administrative Bulletin 2026-1 sets this maximum at $67,610 for single filers and $135,220 for married filing jointly. These amounts are indexed annually for inflation based on the Consumer Price Index as required by MCL § 206.30(1)(f)(iv).

The unified cap applies to all retirement income included in federal adjusted gross income, including distributions from defined benefit pensions (public and private), defined contribution plans (401(k), 403(b)), individual retirement accounts (IRAs), self-employed retirement plans, and other qualified distributions reported on IRS Form 1099-R. Taxpayers must combine all deductible public retirement income—whether federal, Michigan, or from another state government with a similar or reciprocal deduction—and any private retirement income, then apply the limitation to the combined total. MCL § 206.30(10)(d).

## Exception for Taxpayers Born Before 1946

Taxpayers born before January 1, 1946 may elect to continue taking an unlimited deduction for all retirement or pension benefits received from public sources under MCL § 206.30(9)(a), which predates PA 4. Public retirement for this purpose includes retirement or pension benefits from federal employment, Michigan state and local government employment (including political subdivisions), military service, railroad retirement (Tier 2), and the Michigan National Guard. However, these taxpayers must still reduce the maximum allowable subtraction for any private retirement income by the amount of any public retirement benefits subtracted. MCL § 206.30(1)(f)(iv).

Alternatively, taxpayers born before 1946 may elect to apply the unified cap under subsection (10) if that produces a more favorable result; the election is made annually.

## Special Election for Public Safety Retirees

MCL § 206.30(11) provides that for tax years beginning on or after January 1, 2023, a taxpayer with retirement or pension benefits received for services as:

• a public police or fire department employee subject to 1969 PA 312, MCL 423.231 to 423.247,
• a state police trooper or state police sergeant subject to 1980 PA 17, MCL 423.271 to 423.287, or
• a corrections officer employed by a county sheriff in a county jail, work camp, or other facility maintained by a county that houses adult prisoners

may elect to deduct retirement or pension benefits as provided under subsection (1)(f) without any additional limitations or restrictions, or may elect to apply the limitations and restrictions in subsection (9) or (10). Most public safety retirees will benefit from the unlimited option.

## Items Fully Exempt (Not Subject to the Cap)

The following retirement-related items are fully exempt from Michigan income tax and do not count against the retirement subtraction cap:

• Social Security benefits: To the extent included in federal adjusted gross income, Social Security benefits are subtracted in full. MCL § 206.30(1)(f)(i).
• Military retirement pay: Retirement or pension benefits from service in the U.S. armed forces and Michigan National Guard are fully deductible without dollar limitation. MCL § 206.30(1)(e).
• Railroad Retirement Act benefits: Benefits paid under the Railroad Retirement Act of 1974 are treated the same as Social Security benefits to the extent they are the substantial equivalent of Social Security benefits (Tier 1). MCL § 206.30(1)(f)(i). Tier 2 railroad retirement benefits are treated as public retirement income.

## Qualified Distribution Requirement

To qualify for the retirement subtraction, the distribution must be made upon retirement under the specific rules of the retirement plan. Revenue Administrative Bulletin 2026-1 explains that for Michigan purposes, qualifying retirement benefits include most payments reported on IRS Form 1099-R, including defined benefit pensions, IRA distributions, and most payments from defined contribution plans. The Michigan Department of Treasury provides a 1099-R distribution chart to determine whether a distribution qualifies as a retirement or pension benefit subtraction.

## Phase-In Schedule and Effective Date

PA 4 of 2023 was signed March 7, 2023, and took effect February 13, 2024. MCL § 206.30(10) established a four-year phase-in schedule for the unified cap, with taxpayers born after 1945 eligible to deduct the following percentages of the inflation-adjusted maximum:

• 2023 tax year: 25% (for taxpayers born 1946 or later who have reached age 67)
• 2024 tax year: 50% (for taxpayers born 1946 or later who have reached age 62)
• 2025 tax year: 75% (for taxpayers born 1946 or later who have reached age 59)
• 2026 tax year and later: 100% (for all taxpayers born after 1945, regardless of age)

Taxpayers may elect each year to use either the phase-in method under subsection (10), the birth-year tier method under subsection (9), or (if eligible) the public safety election under subsection (11), whichever produces the most favorable result.

Source: MCL § 206.30; Revenue Administrative Bulletin 2026-1

Michigan determines residency based on domicile, with a statutory presumption for individuals present in the state for 183 days or more during the tax year. The distinction between domicile and physical presence is critical for snowbirds, remote workers, and individuals claiming to have changed residency.

## Statutory Definition of Resident

Under MCL § 206.18(1)(a), "resident" means an individual domiciled in Michigan. "Domicile" is defined as "a place where a person has his true, fixed and permanent home and principal establishment to which, whenever absent therefrom he intends to return, and domicile continues until another permanent establishment is established." A person may have multiple residences but can have only one domicile at any given time.

## 183-Day Statutory Presumption

MCL § 206.18(1)(a) establishes a bright-line rule: "If an individual lives in this state at least 183 days during the tax year or more than 1/2 the days during a taxable year of less than 12 months he shall be deemed a resident individual domiciled in this state." This statutory presumption treats the individual as domiciled in Michigan regardless of where the individual claims domicile is located. The 183-day test is measured by physical presence during the calendar tax year (or the applicable short tax year).

## Changing Domicile: Three-Part Test

Once an individual establishes domicile in Michigan, changing domicile requires satisfying three separate elements, all of which must occur concurrently. Revenue Administrative Bulletin 1990-6 explains that domicile is not lost unless there is "a concurrence of all the following: The specific intent to abandon the old domicile."

The Michigan Department of Treasury applies a three-part test through Form 3799 (Statement to Determine State of Domicile):

1. Specific intent to abandon the Michigan domicile. The individual must have subjective intent to give up Michigan as the permanent home. Form 3799, Part B, examines factors such as maintaining a Michigan driver's license, Michigan voter registration, Michigan vehicle registration, owning or renting a Michigan home, and the disposition of Michigan property.

1. Specific intent to acquire a new domicile outside Michigan. The individual must intend to establish a new permanent home in another state. Form 3799, Part C, examines whether the individual filed a formal declaration of domicile in the new state, obtained a driver's license in the new state, filed income tax returns in the new state as a resident, and registered to vote in the new state.

1. Physical presence in the new domicile. The individual must actually move to and be physically located in the new state. Form 3799, Part D, considers whether the individual, spouse, and dependents moved to the new state; whether bank accounts were established in the new state; and whether the individual joined organizations (churches, clubs, etc.) in the new state.

All three elements must be satisfied at the same time for domicile to change. The date on which all three requirements are first met is the date of the domicile change, and the individual files as a part-year resident for that year.

## Evidentiary Factors

The Michigan Department of Treasury considers multiple factors to determine domicile, none of which is individually controlling. These factors, drawn from Form 3799 and Revenue Administrative Bulletin 1990-6, include:

• Location of the individual's most important possessions
• Where the individual's family (spouse and dependents) resides
• State of voter registration
• Club and lodge memberships
• State issuing automobile licenses and vehicle registration
• Mailing address used for official documents
• State of driver's license or identification card
• Location of bank accounts
• Where the individual operates a business
• Address used on federal income tax returns
• State in which the individual would file for divorce

Revenue Administrative Bulletin 1990-6 notes that "the failure of a person to pay income taxes in the state to which he claims to have domicile is very significant."

## Presumption and Burden of Proof

Form 3799 is voluntary but states: "Without the necessary information, the Michigan Department of Treasury will assume the individual was a Michigan resident." The burden of proving a change of domicile rests on the taxpayer. Simply spending winter months in another state (the classic "snowbird" scenario) does not change domicile. The Michigan income tax instructions explain that "a temporary absence from Michigan, such as spending the winter in another state, does not make a person a part-year resident for tax purposes."

## Part-Year Resident Treatment

MCL § 206.18(1)(a) provides: "If an individual during the taxable year being a resident becomes a nonresident or vice versa, taxable income shall be determined separately for income in each status." A taxpayer who changes domicile mid-year files as a part-year resident for that tax year, reporting all income (from any source) earned while a Michigan resident, and only Michigan-source income earned while a nonresident.

Source: MCL § 206.18; Michigan Department of Treasury Form 3799 (Rev. 04-18); Revenue Administrative Bulletin 1990-6

Several Michigan cities levy their own local income tax on individuals, in addition to the Michigan state personal income tax. Authority to impose a city income tax is granted by the Michigan Uniform City Income Tax Ordinance (MCL § 141.501 et seq.).

Cities Imposing Local Income Tax According to Michigan Department of Treasury, the following 24 cities impose a city income tax as of 2024:

• Albion
• Battle Creek
• Benton Harbor
• Big Rapids
• Detroit
• East Lansing
• Flint
• Grand Rapids
• Grayling
• Hamtramck
• Highland Park
• Hudson
• Ionia
• Jackson
• Lansing
• Lapeer
• Muskegon
• Muskegon Heights
• Pontiac
• Port Huron
• Portland
• Saginaw
• Springfield
• Walker

Source (current as of 2024): Michigan Department of Treasury – Cities with Income Tax

Resident and Nonresident Tax Rates Most cities follow the statutory default rates:

• Residents: 1% of taxable income
• Nonresidents: 0.5% of taxable income earned in the city

However, four cities are authorized to levy higher rates:

• Detroit: 2.4% for residents, 1.2% for nonresidents
• Grand Rapids: 1.5% for residents, 0.75% for nonresidents
• Highland Park: 2% for residents, 1% for nonresidents
• Saginaw: 1.5% for residents, 0.75% for nonresidents

Rates are set by city ordinance, with statutory ceilings (see MCL § 141.503, § 141.509, and Detroit’s special authorization under § 141.615). See rate confirmation at Michigan Department of Treasury – City Tax Rates (as of 2024).

Reporting and Paying City Income Tax Except for Detroit, city income tax is administered by each city’s own income tax department. Detroit city income tax is administered by the Michigan Department of Treasury since 2015. Employees working in a city with an income tax will generally have withholding through their employer. Most city returns are due by April 30 following the taxable year, whereas Detroit’s due date aligns with the state return deadline. Forms and e-filing options are available from either the city or Treasury (for Detroit).

City and state income taxes are reported separately: taxpayers must file both a state MI-1040 and a city return if subject. Each city sets its own administrative procedures for appeals and payments; refer to each city’s tax office for details.

Source: Michigan Department of Treasury – What cities impose an income tax? Source: MCL § 141.503, § 141.509, § 141.615 Source: Michigan Department of Treasury – City Tax Rates (2024)

For tax years 2026 through 2028, Michigan law temporarily allows Tier 3 taxpayers (those born after 1952, i.e., 1953–1958 and later) who are age 67 or older to claim both the full Michigan standard deduction and the subtraction for Social Security income. This temporary rule is the result of Public Act 24 of 2025, effective October 7, 2025, which amended MCL § 206.30(9)(e).

Background and Change: Previously, MCL § 206.30(9)(e) required taxpayers who elected the standard deduction to reduce (offset) the standard deduction by the amount of any Social Security subtraction and personal exemption. Under PA 24 of 2025, for tax years beginning January 1, 2026, through December 31, 2028, Tier 3 taxpayers age 67 or older may claim both the standard deduction (e.g., $20,000 single / $40,000 joint, inflation-adjusted) and the full Social Security subtraction. Personal and other retirement-related subtractions continue to offset the standard deduction as before, but the Social Security subtraction no longer reduces the allowable standard deduction in these years.

Agency Guidance: Revenue Administrative Bulletin (RAB) 2026-1 confirms: "For tax years 2026 through 2028, these taxpayers … may subtract both the Social Security income and a full standard deduction." The Michigan Department of Treasury's November 17, 2025 Taxpayer Notice, "Social Security Taxation Changes in Public Act 24 of 2025," likewise confirms that Tier 3 taxpayers age 67+ may stack these subtractions temporarily.

Example: A single taxpayer age 69 in 2026 with $8,000 in Social Security income (included in federal AGI) may subtract $8,000 for Social Security and claim the full $20,000 (indexed) standard deduction—subject only to any offset for the personal exemption or other non-Social Security retirement subtractions. The standard deduction figure used here is for illustration only; refer to Treasury guidance for annually updated limits.

Sunset: This stacking rule only applies to tax years 2026, 2027, and 2028. For tax years beginning after December 31, 2028, the pre-existing offset rule under § 206.30(9)(e) resumes.

Source: Public Act 24 of 2025; MCL § 206.30(9)(e) as amended; Revenue Administrative Bulletin 2026-1; Michigan Treasury Notice 11/17/2025

Michigan allows a refundable Earned Income Tax Credit (EITC) equal to 30 percent of the federal EITC for tax years beginning after December 31, 2022. Earlier years used lower percentages, and tax year 2022 included a supplemental retroactive payment to bring the total credit to 30 percent of the federal amount.

Legal basis and rate The Michigan EITC is authorized by MCL § 206.272. For tax years after 2022, the credit equals 30% of the allowable federal EITC (calculated under IRC § 32). For 2022, the statutory percentage was 6%, but Public Act 4 of 2023 provided for a supplemental payment of 24% so all eligible claimants effectively receive a total of 30% for tax year 2022. Previous years used the following rates: 20% (2009–2011), 6% (2012–2021).

Refundability and eligibility The Michigan EITC is fully refundable. Taxpayers must qualify for and claim the federal EITC on their federal return to be eligible on the state return. If the Michigan credit exceeds liability, the excess is refunded to the taxpayer.

How to claim Eligible taxpayers claim the Michigan EITC by completing line 27a on Form MI-1040, the state individual income tax return, and attaching any required schedules. The Michigan Department of Treasury issues a refund even if the taxpayer owes no tax. For tax year 2022, the supplemental adjustment was processed by Treasury automatically for previously filed returns; late filers will receive the correct amount on their 2022 MI-1040.

Source: MCL § 206.272 Source: Michigan Department of Treasury – EITC Guidance

Not yet human confirmed.

Michigan requires individuals to make quarterly estimated income tax payments if they expect to owe more than $500 in Michigan income tax for the year after accounting for withholding and credits. This obligation applies to residents, nonresidents, sole proprietors, and others with Michigan-source income if the threshold is exceeded, per MCL § 206.301 and the Department of Treasury's guidance.

Who Must Pay: A taxpayer (or joint filers) must make estimated payments if they anticipate owing over $500 for the year after withholding and credits. This typically includes individuals with significant self-employment, investment, pension, or other non-wage income not subject to Michigan withholding.

Due Dates: Estimated tax is paid in four equal installments, due:

• April 15
• June 15
• September 15 of the tax year
• January 15 of the following year

If a due date falls on a weekend or holiday, the next business day applies. Overpayments can be applied to future installments within the same tax year.

Underpayment Rules and Interest: To avoid an underpayment penalty (interest), Michigan requires that taxpayers pay, through withholding and timely estimated payments, at least 90% of the current year's income tax liability or 100% of the previous year's liability. If less than these amounts are paid by the quarterly deadlines, interest is charged on the underpaid amount at a rate set by the Department of Treasury (based on 1% above prime rate). Michigan's instructions do not impose a fixed-amount penalty by percentage; penalties are assessed through underpayment interest.

Taxpayers use Form MI-1040ES to compute and pay estimated tax. Payments may be made online or by mail.

Source: MCL § 206.301 Source: Michigan Department of Treasury – Estimated Tax Payments FAQ Source: MI-1040ES Instructions (2026)

Human confirmed by Michigan SALT practitioner review as of 2026-06-15.

Michigan taxes nonresidents only on income sourced to Michigan as defined by statute and administrative regulation. The rules governing the sourcing of wages for remote work, allocation of business and pass-through entity income, and treatment of capital gains or Michigan real/tangible property are as follows:

Wages, Remote Work, and Duty-Days Allocation For nonresident individuals, Michigan imposes income tax only on compensation for personal services physically performed within Michigan. The statute explicitly allocates compensation for labor or services "rendered within this state" to Michigan—there is no "convenience of the employer" rule, and the authority is silent on special treatment for remote/hybrid work arrangements. Wages for days worked remotely outside Michigan by a nonresident, even for a Michigan employer, are not Michigan source. If services are performed inside and outside the state, the compensation must be allocated "in the same ratio that the work performed…in Michigan bears to the work performed everywhere," typically using duty-days or time apportionment. See:

• MCL § 206.110(1), (2)(a)–(b): defines Michigan-source wages.
• Michigan Admin. Code R 206.12(2): "The amount attributable to services within Michigan shall be determined by the ratio that the number of days worked in Michigan bears to the total number of days worked everywhere during the period."

Source: MCL § 206.110 Source: Michigan Admin. Code R 206.12

Business and Pass-Through Income Nonresidents are taxed on their share of income from businesses, partnerships, LLCs, or S corporations that is derived from business activity conducted in Michigan. If the business operates both within and outside Michigan, the taxpayer’s share is apportioned pursuant to the single sales factor—i.e., the ratio of Michigan sales to total sales (see MCL § 206.623 for individuals and § 206.661 for pass-through entities).

Source: MCL § 206.623 Source: MCL § 206.661

Capital Gains, Rents, and Michigan Property Capital gains from the sale or exchange of Michigan real property or tangible personal property by a nonresident are allocated to Michigan. Gains or losses from sales of intangibles (e.g., stock, bonds) are sourced to Michigan only if the property had "a business situs" in Michigan (MCL § 206.110(2)(c), (e)). Rents and royalties from Michigan property are also Michigan source.

Source: MCL § 206.110(2)(c), (e) Source: Michigan Admin. Code R 206.12(4), (5)

Telecommuting and Mobile Work There is no explicit statutory or regulatory guidance for how temporary telecommuting or mobile work arrangements affect Michigan-source income for nonresidents. The statutory and regulatory language imposes sourcing based solely on the location where services are physically performed. Authority is silent beyond this point as of 2026-06-16.

Reciprocal States Michigan’s reciprocity agreements with IL, IN, KY, MN, OH, and WI generally mean nonresidents from these states are only taxed by their home state for compensation, even if working in Michigan. Reference: Michigan Withholding Reciprocity Examples

Not yet human confirmed. All facts current as of 2026-06-16; where authority is silent, this is stated explicitly.

Michigan offers two prominent refundable credits for residents: the Homestead Property Tax Credit (claimed with Form MI‑1040CR) and the Home Heating Credit (Form MI‑1040CR-7). Both provide relief but have distinct eligibility rules, calculation bases, and claim procedures. This section details statutory, regulatory, and 2025 Treasury-published eligibility, phaseouts, exclusions, and practical process points for each credit as they intersect with the MI-1040 personal income tax return.

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Homestead Property Tax Credit (Form MI‑1040CR)

• Eligibility:
• Resident owners or renters who occupy a Michigan homestead for at least six months in 2025 may claim the credit.
• Resource Cap: Households with total resources above $67,300 (2025 limit; Booklet p. 3) are ineligible. "Household resources" is broadly defined in statute (MCL § 206.510(6)) and excludes certain forms of income such as life, accident, or health insurance benefits, federal or state tax refunds, and certain adoption subsidies (Booklet p. 8).
• Ineligibility: You cannot claim if you own more than one homestead at a time, your property is 100% exempt from property taxes, or rent is subsidized by government or paid directly to your landlord by a government agency (MCL § 206.512(3); Booklet p. 7).

• Calculation:
• Basic Method: For most claimants, the credit equals 60% of property taxes (or for renters, 23% of rent considered tax) paid on a principal residence for the year that exceed 3.2% of total household resources, up to a maximum of $1,700 (2025; Booklet pp. 3, 23).
• Senior/Disabled Alternative: Taxpayers age 65+, or disabled, may use the "alternate credit" if it yields a higher benefit, subject to different phaseout rules (Booklet pp. 3, 17–19).
• Renters: Renters calculate "property taxes equivalent" as 23% of total rent paid (MCL § 206.513; Booklet p. 22).
• Phaseout: Credit amounts are reduced as household resources rise; see phaseout tables in the Booklet (pp. 25–27).
• Claiming: File Form MI-1040CR with the MI-1040 or by itself. The credit is refundable; excess may be refunded regardless of tax due.

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Home Heating Credit (Form MI‑1040CR‑7)

• Eligibility:
• Michigan residents who meet household income limits (e.g., $16,042 for a household of one, $22,016 for two in 2025; Booklet p. 5) may apply, whether owning or renting.
• Applicants must have heating costs separate from rent, or (subject to reduced benefit) heat included in rent.
• Not available to full-time institution residents (Booklet p. 5).

• Calculation:
• Credit may be claimed under the "Standard Allowance" based on income and household size (Booklet pp. 4–6, Table A) or under "Alternate Heating Cost" method for those whose heating costs exceed the standard table's benefits.
• For heat included in rent, only 50% of the standard allowance is available (Booklet p. 6).
• Maximum credit determined by household size, resources, and heat type; see Table A for 2025 figures.

• Claiming:
• File Form MI-1040CR-7 by September 30, 2026. Credit is refundable and may be claimed separately from, or with, the MI-1040 (MI-1040 filing is not required to claim only the heating credit).

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Coordination & Tax Status

• Both credits are refundable, can be claimed even if not otherwise required to file an MI-1040, and are not subject to Michigan income tax. Claiming one has no impact on eligibility or amount for the other. Duplicate or fraudulent claims are barred by statute and Treasury procedure.

Source: MCL § 206.508–522; MI-1040CR 2025 Booklet, Michigan Department of Treasury; MI-1040CR-7 2025 Booklet, Michigan Department of Treasury