What Is the Minimum Amount of Income Required to Pay Michigan State Income Tax?

by Maureen Malone ; Updated July 27, 2017

If you earned income in Michigan, you may have to file income taxes with the Michigan Department of Treasury using Form MI-1040 Individual Income Tax Return. As of 2010, Michigan tax payers pay a flat income tax rate of 4.35 percent. Some cities including Detroit and Saginaw also charge a city tax.

Filing Requirements

If you file a federal income tax return, you should also file taxes with Michigan, even if you do not owe any income taxes. You must file and pay taxes if your adjusted gross income from your federal return exceeds your Michigan state exemptions. Taxpayers receive a personal exemption of $3,600 as of 2010. So if you earn more than $3,600 per year you may owe Michigan state taxes depending on your other deductions and credits.

Tax Credits and Deductions

Tax deductions help to decrease your taxable income while credits directly decrease the amount you owe in taxes. Some credits that Michigan taxpayers may be eligible for include Earned Income Tax Credit, Vehicle Donation Credit and Public Contribution Credit. Some deductions include losses from disposal of property and some distributions from individual retirement accounts to pay for higher education or charitable contribution.

Estimated Payments

If you are self-employed or your employer does not withhold enough for taxes, you must pay estimated taxes each quarter throughout the year if you expect to owe more than $500. If you fail to make payments or underpay your estimated taxes, you will be charged a penalty of 25 percent of taxes owed.

Michigan Income Tax and Other States

If you live in Michigan, but work in another state, you must still pay income tax on that money both in Michigan and possibly in the other state. Michigan has reciprocal agreements with Illinois, Indiana, Kentucky, Minnesota, Ohio and Wisconsin which means Michigan residents only pay Michigan income taxes on wages earned in these states. Individuals who moved to or from Michigan in the middle of the year must pay income tax on money earned while living in Michigan, but not on money earned while residing in another state.

About the Author

Maureen Malone started writing in 2008. She writes articles for business promotion and informational articles on various websites. Malone has a Bachelor of Science in technical management with an emphasis in biology from DeVry University.