Taxes in Michigan

Updated:

Retirement Living takes an unbiased approach to our reviews. We may earn money when you click a partner link. Learn More

Michigan - State

Social Security and military pensions are exempt in Michigan, but other retirement income is taxed based on your birth year. Municipalities can tack on their own income tax (this includes non-residents). Below, we explain various Michigan state taxes affecting retirement income, such as sales tax, inheritance tax, and property taxes.

For information regarding taxes in other states, see Retirement Taxes by State.

SmartAsset Financial Advisors logo
4.7 Stars

SmartAsset Financial Advisors

  • Advisors Near You
  • No-Fee Options

Michigan Tax Rates

State Sales Tax6%
Avg State/Local Sales Tax6%
Gas Tax$0.48 per gallon
Diesel Tax$0.18 per gallon
Cigarette Tax$2.00 per pack
Income Tax4.25%
Effective Tax Rate:4.25%
Property Tax1.24%
Social Security TaxNone
Medical/Dental Deduction:None
Federal Income Tax Deduction:None
Retirement TaxPartial
State Taxes in Michigan

Michigan State Taxes Explained

Michigan Sales Tax

6%, with no local taxes. State law requires the gas tax to adjust annually. The 2025 gas tax is $0.16.

Michigan Income Taxes

4.25%. Cities can also levy income taxes on residents and non-residents (who are taxed at half the rate).

Michigan Property Taxes

The effective property tax rate in Michigan is 1.24%, which is $1,921 on a $154,900 property.

Michigan’s homestead property tax credit is available to homeowners and renters. The value of the home must be $154,400 or less. The total household income must be under $67,300 (annualized for part-year residents). Those receiving 100% of household resources from the Michigan Department of Health and Human Services do not qualify. Learn more about the special situations that affect the Michigan Homestead Property Tax Credit here.

Michigan’s Principal Residence Exemption Program exempts homeowners from their local school operating millage up to 18m. Another tax relief program allows residents aged 62 or older with under $40,000 in annual income to apply for a summer property tax deferment.

Michigan Retirement Taxes

Michigan taxes benefits based on the year you were born.

Born Before 1946: Retirees in this group are fully exempt from state income tax on retirement income. 

Born between 1946 and 1958: Eligible to deduct up to 75% of the 2025 maximum retirement income exemption amount, 50% of the 2024 amount, and 25% of the 2023 amount (25%- $14,240 for single filers or $28,480 for joint filers).

Born between 1959 and 1962: Eligible to deduct up to 75% of the 2025 maximum retirement income exemption amount and 50% of the 2024 amount.

Born between 1963 and 1966: Eligible to deduct up to 75% of the 2025 maximum retirement income exemption amount. 

Born in 1967 or later: No exemption for retirement income in 2025. However, starting in 2026, retirees in this group will be eligible to deduct 100% of the maximum retirement income exemption amount. 

Military and Railroad Retirement Benefits: These benefits remain exempt from Michigan state income tax, regardless of birth year.

For a complete breakdown of retirement and pension taxes, see Michigan’s Retirement and Pension Information.

Michigan Estate and Inheritance Taxes

There is no inheritance tax or estate tax in Michigan.

For more information, visit the Michigan Department of Treasury.

I’d like to explore senior living options in:

My contact information is:


By clicking the button “Start my search”, I give consent for Retirement Living and/or the BRAND I am matched with to email, text or call me with additional information or marketing offers, at the number I have provided, through automated and/or pre-recorded calls and texts, and that my consent is not a condition to purchase. I also agree by electronic record to the Retirement Living Terms of Use and Privacy Policy.

We may earn money from our partners when you click a link, complete a form or call a phone number.

We believe everyone deserves to make thoughtful, informed purchase decisions. As a result, we provide our buyers guides and local guides free for consumers. We may receive compensation from our partners. However, Retirement Living independently researches companies, and the compensation we receive does not affect the analysis of our staff. Retirement Living will not include companies on our guides that do not meet our quality standards. The compensation we receive from our partners may impact how and where companies appear on our site, including the order in which they appear. As an Amazon Associate Retirement Living earns from qualifying purchases.

Retirement Living independently researches companies, and we use editorial discretion to award companies with special recognition (i.e. Great Value) based on our staff’s judgment. We do this to help you identify companies that will meet your specific buying needs, and we do not receive compensation for these designations.

Get Insider Access

Get special offers, advice and tips from Retirement Living delivered to your inbox.






Get Insider Access

Get special offers, advice and tips from Retirement Living delivered to your inbox.