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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. Taxpayers and preparers are encouraged to review payments made for tax year 2025 and adjust the third or fourth quarter estimates as needed to avoid potential underpayment. Additional Treasury guidance is forthcoming and will be posted to our website in the coming weeks.
