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Notice: Flow-Through Entity Tax Rate Reduced to 4.05% for Tax Years Beginning in 2023

Date: May 3, 2023

The Michigan Flow-through Entity Tax (FTE tax) is levied under Part 4 of the Income Tax Act, MCL 206.801 et seq., by applying “the same rate levied and imposed under section 51 for that same tax year.”  Treasury has issued a Notice determining the rate under Section 51 is reduced, therefore, the FTE tax rate is reduced to 4.05% for all flow-through entities with tax years beginning in 2023. 

Treasury will update forms, instructions, and guidance as necessary to reflect the change to the annual FTE tax rate for tax years beginning in 2023. These changes, as well as any other future guidance, will be available on Treasury’s website at