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2026 rules · verified against Michigan's primary source
Michigan fully exempts military retirement pay from state income tax.
Military retirement pay is fully exempt from Michigan income tax with no dollar cap; deduct it on Schedule 1.
Treatment
fully exempt
Top marginal rate
4.25%
Source: https://www.michigan.gov/taxes/questions/iit/accordion/military/are-military-retirement-benefits-exempt-from-michigan-individual-income-tax · verified July 2026
Estimated Michigan state income tax on your military retirement, using the top marginal rate on the taxable portion (an upper bound; your effective rate is usually lower).
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