Michigan tax filing: file MI state taxes online, Form MI-1040, flat 4.25% rate

Do you have to file a Michigan tax return?

Michigan bases its filing requirement on your income compared with your total exemption allowance rather than a fixed dollar cutoff. In general, a Michigan resident must file a Form MI-1040 for 2025 if their adjusted gross income is more than their exemption allowance. With the base personal exemption at $5,800, a single filer claiming one exemption generally must file once income passes that amount, and the threshold rises with each additional exemption you claim.

You should also file if Michigan tax was withheld from your pay and you want it refunded, or to claim a refundable credit such as the Michigan Earned Income Tax Credit or the Homestead Property Tax Credit, even when your income is below the filing threshold. Residents file the MI-1040; part-year residents and nonresidents file the MI-1040 with Schedule NR to allocate income earned in Michigan. The current rules are published by the Michigan Department of Treasury, and the state tax filing pillar compares Michigan with the other states.

The flat rate and personal exemption

Michigan is a flat-tax state. For tax year 2025 it taxes income at 4.25 percent, the same rate as 2024. The rate has a bit of recent history worth knowing: a 2015 law briefly triggered a lower 4.05 percent rate for 2023 only, and it reverted to 4.25 percent for 2024 and stayed there for 2025 after the state's annual rate calculation found no further reduction was triggered.

Michigan has no standard deduction. Instead it gives a personal exemption for you, your spouse if filing jointly, and each dependent. For 2025 the amounts are:

The special exemption is added for taxpayers or dependents who are deaf, blind, hemiplegic, paraplegic, quadriplegic, or totally and permanently disabled. Your total exemption allowance is subtracted from income before the flat 4.25 percent rate is applied, so exemptions directly lower what you owe. Michigan does not tax Social Security benefits.

Michigan city income tax and the retirement subtraction

Two features of a Michigan return catch people off guard: local city taxes, and a retirement deduction that is changing every year through 2026.

City income tax. Twenty-four Michigan cities levy their own income tax on top of the state's. Detroit is the highest at 2.4 percent for residents and 1.2 percent for nonresidents who work in the city; Grand Rapids and a few others sit at 1.5 percent for residents, and most remaining cities charge 1 percent for residents and 0.5 percent for nonresidents. Detroit city returns are filed with the state on Form 5118 for residents and Form 5119 for nonresidents, while other cities use their own forms. Residents are taxed on all income; nonresidents only on income earned inside the city.

The retirement and pension subtraction. Michigan is phasing out the pension tax it created in 2011, under the Lowering MI Costs Plan, restoring a broad deduction for retirement and pension income over tax years 2023 through 2026. For 2025, taxpayers born after 1945 and before 1967 can deduct up to 75 percent of the full retirement subtraction, rising to 100 percent in 2026, and public-safety retirees can deduct their benefits without the cap. The rules let you choose whichever calculation gives the larger deduction. TaxFile prepares your federal and Michigan state returns; check whether your city requires a separate return, since those are filed apart from the MI-1040.

Michigan tax filing deadline, extension and filing online

Michigan's deadline is April 15, 2026 for tax year 2025 returns, matching the federal date. If you have a valid federal extension, Michigan automatically extends your state filing deadline to the federal date, and you attach a copy rather than filing a separate form. If you have no federal extension, or you owe Michigan tax, file Form 4, the Application for Extension of Time to File Michigan Tax Returns, to get six more months.

The extension gives you more time to file, not more time to pay. Any tax owed is still due April 15, 2026, and penalty and interest run on a late payment; pay through Michigan e-Payments or with Form 4. The Michigan Earned Income Tax Credit is now worth 30 percent of the federal credit, and it is refundable, so lower-income workers should file to claim it even if they otherwise would not have to.

Filing electronically is the practical default, and the Michigan return builds on your federal figures. TaxFile prepares both from one pass:

• Upload or talk. Drop in your W-2s and 1099s and it reads them, or describe your year and it asks what it needs.
• Federal and Michigan together. One set of documents produces both returns, with the flat 4.25 percent rate and the $5,800 personal exemption applied.
• Exemptions and subtractions checked. It applies your exemption allowance and tests the retirement and pension subtraction for 2025.
• Error check, then you approve. Nothing is e-filed until you review and approve every line, through an authorized IRS e-file provider.

Pricing is $39 for a simple return, $89 self-employed, $199 business, plus $19 for each state return. There is no free tier. If your Michigan income comes from contract or freelance work, self-employed tax filing covers Schedule C and Schedule SE in more detail. TaxFile does not e-file federal extensions or prepare amended returns, does not file city income tax returns, and does not handle capital gains on Schedule D, rental income on Schedule E, or cryptocurrency. TaxFile is self-prepared tax software and does not provide personalized tax advice, and no refund amount is guaranteed.