Detroit residents pay an additional 2.4%
Detroit residents pay 2.4% city income tax on top of MI's 4.25% state rate. Non-residents working in Detroit pay 1.2%. Combined Detroit resident rate: 6.65% state+local — meaningful at higher incomes.
MI retirement income changes
Michigan's 2023 tax law (PA 4) phased back in retirement income exemptions through 2026. Public pensions are fully exempt; private pensions and 401(k) distributions are partially exempt based on age and birth year.
Low cost of living amplifies tax efficiency
Michigan's median home price (~$240K) is roughly 60% of the national average. Combined with a flat 4.25% income tax, a $100K MI salary often outperforms a $130K coastal salary on take-home + housing.
FAQ
Does MI tax Social Security?
No. MI does not tax Social Security benefits at the state level. Other retirement income is subject to evolving exemption rules tied to birth year.
What's the Detroit city tax?
Detroit residents pay 2.4% city income tax; non-residents working in Detroit pay 1.2%. Other MI cities with income taxes include Grand Rapids (1.5%/0.75%), Lansing, Flint, and Saginaw.
Does MI allow 401(k) deductions?
Yes — MI follows federal treatment for 401(k) contributions, reducing both federal and MI taxable wages.
How this calculator is built
Independently maintained
Written by Sam Doshi and the RevenueLab editorial team. We don't sell the data feeds this tool is built on.
Sourced from primary data
Benchmarks come from public AdSense / Stripe / IRS disclosures and reader-submitted data — never third-party "$X per view" claims. Full methodology.
Last reviewed
June 2026. We re-check every figure on the platform on a rolling quarterly cycle.
Editorial standards
See our editorial policy and disclaimer. Results are estimates, not advice.