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Understanding Personal Income Tax in Michigan

Filed under State Taxes. Fact checked on February 13, 2013.

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Personal income taxes in Michigan are discussed.

If you are a resident or nonresident of Michigan and receive taxable income individually from property owned or business transacted in Michigan, you are subject to tax on net income. Therefore, if you are operating your business as an S corporation, partnership, limited liability company, or sole proprietorship, you will be subject to an income tax on your business income that passes through to you.

Michigan’s personal income tax rate for 2012 equates to an annualized rate of 4.33 percent. For 2011, the personal income tax rate was 4.35 percent. During 2012, the rate was reduced from 4.35 percent, for 2011, to 4.25 percent, for 2013 and each tax year thereafter. For 2012, the annualized rate of 4.33 percent applies regardless of when income was received.

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