Michigan income tax rate will increase in 2024, return to 4.25%
(CBS DETROIT) - Michigan's individual income tax rate will rise in 2024, increasing from 4.05% back to 4.25%.
In 2015, the Michigan legislature passed a law that required a temporary reduction of the state's individual income tax rate if the general fund grew faster than inflation.
Last year, the rate was decreased to 4.05% due to this.
State Treasurer Rachael Eubanks, Senate Fiscal Agency Director Kathryn Summers and House Fiscal Agency Director Mary Ann Cleary conducted a calculation and determined the rate would return to 4.25% because the general fund was down 8.33% and inflation went up by 5.06%.
"State law requires that a very specific calculation be conducted annually following release of the state's ACFR to determine the individual income tax rate," said Eubanks. "As anticipated, we found that the conditions were not present for a rate reduction for the 2024 tax year. The tax rate will remain at 4.25%."
Republicans fought to keep the income tax rate at 4.05%, but last year, Attorney General Dana Nessel issued a legal opinion finding that tax reduction only applied to the 2023 tax year, which a judge reaffirmed.