Retire in Michigan: 2026 Tax & Cost of Living Guide
Flat 4.25% income tax with a phased-in retirement income exemption returning to pre-2011 levels by 2026. No estate or inheritance tax.
State income tax
Flat 4.25%
Social Security
Not taxed
Estate tax
None
Property tax
1.38%
How Michigan Taxes Retirement Income
- Social Security
- Not taxed
- Public pensions (state/federal)
- Taxed
- Private pensions
- Taxed
- 401(k) / IRA withdrawals
- Taxed
Exemption / exclusion
Restored retirement income exclusion up to $56K for 2026 filers (phased in over 4 years starting 2023)
What Would You Pay in State Income Tax?
Rough estimates at the top marginal rate (actual effective rate will be lower for most retirees due to brackets, exemptions, and standard deduction):
| Annual Retirement Income | Estimated State Tax | Effective Rate |
|---|---|---|
| $50,000 | $2,125 | 4.3% |
| $100,000 | $4,250 | 4.3% |
| $200,000 | $8,500 | 4.3% |
We don't have detailed cost-of-living data for a city in Michigan yet. See our city guides for 300+ other cities worldwide, or compare Michigan against other US states below.
States With No Income Tax
Compare Against Other States
All 50 US States + DC
Ranked by tax-friendliness for retirees. Grouped by income-tax type.
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Tax rates and programs are subject to change. Data is current for 2024–2025. Always consult a qualified tax professional before making relocation decisions.