Michigan Department of Treasury - Taxes

Corporate Income Tax, Individual Income Tax, and Flow-Through Entity Tax Update

Michigan’s Public Act 24 of 2025 changes how income tax is calculated at the state level by decoupling from several federal Internal Revenue Code (IRC) provisions. As a result, certain federal tax deductions enacted with the One Big Beautiful Bill Act (OB3) will be deducted at a slower pace on Michigan returns. Generally, this will cause an initial add-back to the state level calculation beginning with tax year 2025. Michigan also decoupled from some OB3 changes that affect prior tax years (2022 – 2024); amended returns are not required.

Notice: Decoupling Michigan’s Income Taxes from Certain IRC Provisions

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