As we enter the 2026 tax season, Michigan residents should be aware of several important changes that could affect their tax returns. From updated standard deductions to new credits, here's everything you need to know to prepare for filing.
Updated Standard Deduction Amounts
The IRS has adjusted the standard deduction for inflation. For the 2025 tax year (filed in 2026), the new amounts are:
- Single filers: $15,000 (up from $14,600)
- Married filing jointly: $30,000 (up from $29,200)
- Head of household: $22,500 (up from $21,900)
Michigan State Tax Updates
Michigan's flat income tax rate remains at 4.25% for 2025. However, the personal exemption has increased to $5,600 per person. Additionally, Michigan now offers enhanced credits for working families and seniors, including an expanded Earned Income Tax Credit equal to 30% of the federal EITC.
New and Enhanced Tax Credits
Several tax credits have been updated or expanded for the 2026 filing season:
- Child Tax Credit: Up to $2,000 per qualifying child
- Michigan EITC: Now 30% of federal credit (increased from 6%)
- Education Credits: Enhanced deductions for 529 plan contributions
What You Should Do Now
Start gathering your tax documents early, including W-2s, 1099s, and receipts for deductible expenses. If you're self-employed or have a side business, track your income and expenses carefully. Consider scheduling a consultation with our tax professionals to ensure you're taking advantage of all available deductions and credits.
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