Michigan Retirement Income Tax 2025
See how Michigan treats Social Security, private pensions, annuities, and IRA distributions for a full-year resident, then run the official-source estimate with your own income.
Social Security
Social Security is subtracted in full on Schedule 1.
Pension and IRA income
The Lowering MI Costs phase-in subtracts retirement and pension benefits up to an age-dependent maximum on Form 4884.
Estimated 2025 state tax
$416Resident return; local taxes and unmodeled credits excluded.
Modeled state taxable income
$15,577Retirement-income subtraction
$64,423Social Security is subtracted in full on Schedule 1.
The Lowering MI Costs phase-in subtracts retirement and pension benefits up to an age-dependent maximum on Form 4884.
Scope: Form 4884 picks a section from birth year, retirement date and whether benefits came from SSA-exempt employment; only the birth-year test is modeled, through age. Sections B and C are elections for SSA-exempt filers whose caps are lower than Section D at every input this calculator accepts, so the model takes the section the questionnaire routes an ordinary filer to. The separate Michigan Standard Deduction (Worksheet 2), which filers born 1946-1958 may claim INSTEAD when it is more beneficial, the fire/police/county-corrections route to Section A at any age, the military and railroad reduction to the cap, and Michigan city income taxes are not modeled.
Michigan worked example
For a single filer age 68 with $80,000 of federal AGI, including $15,000 of federally taxable Social Security, $30,000 of pension income, $20,000 of IRA distributions, and $15,000 of other state-taxable income:
Retirement subtraction
$64,423
Modeled state taxable income
$15,577
Estimated 2025 state tax
$416
This is an illustration, not a tax return. Local taxes, credits, and unmodeled state adjustments are excluded.
What this model does not include
Form 4884 picks a section from birth year, retirement date and whether benefits came from SSA-exempt employment; only the birth-year test is modeled, through age. Sections B and C are elections for SSA-exempt filers whose caps are lower than Section D at every input this calculator accepts, so the model takes the section the questionnaire routes an ordinary filer to. The separate Michigan Standard Deduction (Worksheet 2), which filers born 1946-1958 may claim INSTEAD when it is more beneficial, the fire/police/county-corrections route to Section A at any age, the military and railroad reduction to the cap, and Michigan city income taxes are not modeled. Review the official instructions before filing.
Review the full Michigan income tax guide →Michigan retirement income tax FAQs
Does Michigan tax Social Security benefits in 2025?
Social Security is subtracted in full on Schedule 1.
Does Michigan tax pensions and IRA withdrawals?
The Lowering MI Costs phase-in subtracts retirement and pension benefits up to an age-dependent maximum on Form 4884.
What does the Michigan retirement tax example include?
The example uses a single filer age 68 with $80,000 of federal AGI, $15,000 of federally taxable Social Security, $30,000 of private pension income, $20,000 of IRA distributions, and $15,000 of other state-taxable income.
Is this a complete Michigan resident return?
No. The estimate focuses on retirement-income treatment and the state rate schedule. It excludes local income tax and does not reproduce every deduction, credit, addition, subtraction, or special pension rule. Form 4884 picks a section from birth year, retirement date and whether benefits came from SSA-exempt employment; only the birth-year test is modeled, through age. Sections B and C are elections for SSA-exempt filers whose caps are lower than Section D at every input this calculator accepts, so the model takes the section the questionnaire routes an ordinary filer to. The separate Michigan Standard Deduction (Worksheet 2), which filers born 1946-1958 may claim INSTEAD when it is more beneficial, the fire/police/county-corrections route to Section A at any age, the military and railroad reduction to the cap, and Michigan city income taxes are not modeled.
Sources
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