Key figures
Michigan accounting
2026, with sources
- Corporate income tax
- 6%On the apportioned or allocated tax base of C corporations and unitary business groups.
- Filing threshold
- $350,000Apportioned or allocated gross receipts (annualized) of this much and CIT liability over $100.
- Services sourcing
- Market-basedReceipts from services are sourced to where the recipient receives the benefit.
A 6% income tax with a $350,000 floor
Michigan’s Corporate Income Tax is 6% of the apportioned tax base of a C corporation or unitary business group. The base starts from federal taxable income with Michigan additions and subtractions, and is apportioned by sales alone; receipts from services are sourced to where the customer receives the benefit, which for SaaS means the customer’s location.
A company with Michigan nexus files only when its apportioned or allocated gross receipts reach $350,000 (annualized for short years) and its liability is more than $100. Michigan’s small business alternative credit can reduce the tax further for qualifying small companies. Unitary groups file one combined return.
Michigan kept the Section 174 rules
Michigan generally adopts the Internal Revenue Code as currently in effect, then decouples by statute. Public Act 24 of 2025 did exactly that for several provisions of the 2025 federal tax law. For the CIT, taxable income is computed as if Sections 168(k), 168(n) and 174A did not exist: no bonus depreciation, and domestic research and experimental costs still capitalized and amortized over five years. Michigan also decoupled from the transition rules that let small businesses deduct 2022–2024 research costs retroactively.
Section 163(j) and Section 179 are applied as they stood on December 31, 2024, too, so interest and expensing limits can differ from the federal return.
What this means for the books
Consider a 12-person SaaS company in Ann Arbor with $3 million of revenue, $2 million of it to Michigan customers, that spends $1.5 million a year on engineering salaries. Federally it expenses that research in 2025. For Michigan it deducts roughly a tenth in year one (five-year amortization with the half-year convention) and the rest over the next five years. The book-tax difference creates a Michigan deferred tax asset that unwinds over time — and a Michigan return that can show taxable income while the federal one shows a loss.
Because of that, a Michigan company’s tax provision needs its own Section 174 schedule; it cannot be copied from the federal workpapers.
Deadlines
- Apr 30CIT annual return (calendar year); extended returns due Dec 31Form 4891
- Apr 15, Jul 15, Oct 15, Jan 15 (calendar year)Quarterly estimates when the year’s liability is expected to exceed $800Form 4913
The federal baseline
This page covers what Michigan adds. The federal rules underneath it apply here too.
Common questions
Do we file a Michigan CIT return at all?
Only once its apportioned or allocated gross receipts reach $350,000 and its liability is over $100. Below that line a company with Michigan nexus has no filing requirement, though it can file to claim a refund of estimates or to create and carry forward a business loss — which is worth doing in a loss year.
Federal law lets us expense R&D again. Does Michigan?
For Michigan, no. Public Act 24 of 2025 decoupled the CIT from the federal Section 174A change: for tax years beginning after December 31, 2024, Michigan taxable income is computed as if domestic research and experimental costs must still be amortized over five years. A startup that deducts its R&D wages immediately on the federal return adds part of them back in Michigan and tracks a Michigan-only amortization schedule.
Accounting next door
- INIndiana accountingIndiana taxes C-corps at 4.9% on a single receipts factor, files separately, adds back bonus depreciation and lets 2022–2024 research costs be deducted in full.
- OHOhio accountingOhio has no corporate income tax; its 0.26% Commercial Activity Tax excludes the first $6 million of Ohio receipts, so the business tax a startup actually meets is its city’s net profit tax.
- WIWisconsin accountingWisconsin taxes corporations at 7.9% on a single sales factor, requires combined reporting for unitary groups, disallows bonus depreciation and adds a 3% surcharge once receipts reach $4 million.
Founder guides on this
- R&D taxThe R&D tax credit and Section 174A for startupsEngineering salaries can earn a federal R&D credit against payroll tax, and Section 174A lets you deduct US research again. What qualifies, what to track.
- US GAAPUS GAAP for early-stage startups, in plain EnglishAccrual accounting, revenue recognition (ASC 606), leases (ASC 842), stock compensation and capitalized software: what each means for a small company.
- FundraisingAudit-ready books before your Series AInvestors, lenders and auditors ask for the same things: accrual statements, reconciled accounts and support for every balance. How to be ready first.
More of the Michigan guide
- ReceivablesReceivables and sales tax in MichiganSales tax registration, economic nexus, whether SaaS is taxable, and collecting from customers
- PayablesPayables and contractors in MichiganPaying vendors and contractors: 1099 filing, use tax, contractor tests and withholding
- PayrollPayroll taxes and employer rules in MichiganWithholding, unemployment insurance, paid leave, minimum wage and the rules on paydays
- ComplianceCompliance and filings in MichiganRegistering to do business, annual reports, franchise tax and the filing calendar
- AdvisoryAdvisory: credits and decisions in MichiganCredits, incentives and the decisions that are cheaper to get right the first time
Sources
Checked against each agency’s own page on . Rates and thresholds change, usually on January 1.
General information for US companies, not tax, legal or accounting advice for yours. Rules and thresholds change; confirm the specifics with a CPA or the agency before you act on them.