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Income Tax Rate Change: Individual Income Tax
Income Tax Rate Change: Individual Income Tax
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When you file your tax year 2023 state income tax return in 2024, you will see the rate adjustment in the form of either a larger refund or less tax owed.
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- Businesses responsible for withholding tax are not required to adjust withholding amounts based on the income tax rate change.
- Employees may submit a revised MI-W4 to their employer (pension recipients may submit a revised MI-W4P to their pension administrator) directing them to adjust withholding amounts at any time.
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Employees may submit a revised MI-W4 to their employer (pension recipients may submit a revised MI-W4P to their pension administrator) directing them to adjust withholding amounts at any time.
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- You may choose to:
- continue using the published withholding tables/software for estimates at 4.25%.
- manually calculate your estimates using the reduced 2023 income tax rate of 4.05%.
- If withholding amounts are not adjusted, a reduction in tax liability will be realized in 2024, when individual and fiduciary returns are filed for tax year 2023.
- You may choose to:
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When you file your 2023 Michigan income tax return in 2024, you will see the rate adjustment via a larger refund or less tax owed.
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When you file the 2023 income tax return, your tax liability will be calculated at 4.05%. You will receive credit for all withholding paid on your behalf and any estimated tax payments you make. If you paid income tax or had withholding done at 4.25% for any portion of tax year 2023, you should expect less tax owed or a larger refund when you file in 2024.