Treasury announced on April 15, 2026 that the statutory trigger for an automatic rate cut was not met, so the individual and fiduciary rate remains 4.25 percent for tax year 2026.
Michigan law requires an automatic reduction in the individual income tax rate when general fund revenue grows faster than inflation. Each spring, after the state publishes its Annual Comprehensive Financial Report, the State Treasurer and the directors of the House and Senate Fiscal Agencies run the calculation.
On April 15, 2026 Treasury announced the result for the 2026 tax year: total general fund revenue for fiscal year 2025 decreased by 1.56 percent while inflation for the period was 2.70 percent, so the conditions for a rate reduction were not met. The rate for individuals and fiduciaries remains 4.25 percent.
For most clients this means no change to Michigan withholding or estimated payments on account of the rate. City income taxes, including Detroit's, are separate and unchanged by this determination.
We will post again if the 2027 determination produces a different result.
Information here is general and is not advice for your situation. For advice about your situation, contact us.
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