How to File LLC Taxes in Michigan (2026)
A single-member Michigan LLC reports its income on Form MI-1040. A multi-member LLC or an S-corp election works the same way, with each member filing their own MI-1040. A C-corp election instead pays Michigan's Corporate Income Tax at a flat 6% rate.
Every classification pairs a federal return with a Michigan return, and the state's individual income tax rate for the current tax year is 4.25%.
Below you'll find the right form for your classification, this year's Michigan rates, the federal taxes layered on top and the extra state taxes that trip up owners who only planned for income tax.
Quick Summary
- Nail down your LLC's tax classification first. That single choice sets which form and rate apply to your return.
- Check the current rate on the Michigan Department of Treasury site before you file. It can shift year to year.
- Run the numbers with a CPA before electing the flow-through entity tax or S-corp treatment. A poor fit can cost more than it saves.
Michigan LLC Tax Summary
Use this table to match your LLC's classification to the right federal form, the right Michigan form, who you file it with and when it's due.
| LLC Type | Federal Form | State Form | Filed With | Filing Deadline & Tax Rate |
|---|---|---|---|---|
| Single-member LLC | Form 1040, Schedule C | Form MI-1040 | Michigan Department of Treasury | April 15 4.25% flat rate (owner's personal return) |
| Multi-member LLC | Form 1065 | Form MI-1040 | Michigan Department of Treasury | April 15 4.25% flat rate (per member's share) |
| S-Corp election | Form 1120-S | Form MI-1040 | Michigan Department of Treasury | April 15 4.25% flat rate (per shareholder's share, or entity-level if FTE elected) |
| C-Corp election | Form 1120 | Michigan CIT return | Michigan Department of Treasury | Same as federal Form 1120 (calendar year) 6% flat CIT rate |
How Michigan LLCs are taxed
Michigan taxes LLCs as pass-through entities by default. The business itself doesn't pay income tax. Profit flows to the members instead, who report it on their own Michigan returns at the individual rate.
An LLC can change how the IRS classifies it for tax purposes. It files Form 8832 or Form 2553, and Michigan follows that federal election. The hub page on how LLC tax filing works covers the federal mechanics behind each election.
Choosing S-corp or C-corp status changes the state form. A C-corp election also moves the LLC onto Michigan's separate Corporate Income Tax.
The Michigan Department of Treasury administers these tax filings. A different office, the Department of Licensing and Regulatory Affairs (LARA), handles a separate filing instead: Michigan's Annual Statement.
That's a business-standing filing rather than a tax return. Its fee sits alongside other setup and maintenance costs on our Michigan LLC cost guide.
1. Michigan income tax rate for tax year 2026
Michigan's individual income tax rate for tax year 2026 is 4.25% [1]. A statutory formula tied to general fund revenue growth can lower that rate some years.
2. Single-member LLC
The owner reports a single-member LLC's profit and loss on Schedule C of their federal Form 1040, then carries the total to their own Form MI-1040. Michigan treats the LLC as a disregarded entity by default, taxed at the individual rate covered above.
The due date matches the federal Form 1040 deadline, April 15 for calendar-year filers. The owner signs and files the return, just like any other personal income.
3. Multi-member LLC
A multi-member LLC files the federal partnership return, Form 1065, then issues each member a Schedule K-1. That form shows each member's share of the profit. Each member reports that share on their own Form MI-1040 with the Michigan Department of Treasury.
Michigan taxes that income at the individual rate covered above, due April 15 for calendar-year filers. Each individual member signs and files their own return.
4. S-Corp election
Filing Form 2553 with the IRS elects S-corp treatment for an LLC, which then files Form 1120-S with the IRS each year. Michigan follows the federal election. Each shareholder reports their share of the profit on their own Form MI-1040 instead.
Shareholders pay Michigan's individual rate on their personal returns, with the same April 15 deadline as any other filer. Those who'd rather pay the tax at the entity level can look at the flow-through entity tax election covered further down this page.
5. C-Corp election
An LLC elects C-corp treatment by filing Form 8832 with the IRS, then files Form 1120 federally each year. Once that election is in place, Michigan taxes the entity itself under the Corporate Income Tax (CIT) rather than taxing the members directly.
The CIT rate is a flat 6% on federal taxable income apportioned to Michigan [2]. A small LLC can skip the CIT entirely. That exemption applies below $350,000 in Michigan gross receipts, or when the annual CIT liability is $100 or less.
The CIT return follows the same due date as the federal Form 1120 return. The CIT replaced Michigan's prior business tax regime for most taxpayers back in 2012.
Federal taxes Michigan LLC owners pay
Every Michigan LLC owner who takes a profit still owes federal self-employment tax on top of whatever state form they file. The rate is 15.3% and covers Social Security and Medicare [3]. No additional self-employment tax gets layered on at the state level.
Owners who expect to owe tax make quarterly estimated payments. Both the IRS and Michigan use the same due dates: April 15, June 15, September 15 and January 15 of the following year [4]. Michigan's version of the voucher is Form MI-1040ES.
Other Michigan taxes that may apply
A Michigan LLC can also owe employer taxes, sales and use tax and local city income tax, on top of whatever it already pays in state and federal income tax.
1. Employer taxes
An LLC with employees registers for unemployment insurance with Michigan's Unemployment Insurance Agency (UIA) and withholds Michigan and any applicable city income tax from employee paychecks.
New employers pay a 2.7% rate on the first $9,000 of each employee's wages for the year [5]. Certain large construction projects are taxed separately.
2. Sales and use tax
An LLC that sells tangible goods in Michigan collects and remits a 6% sales tax. Residential electricity, gas and home heating fuel carry a lower 4% rate instead [6].
Use tax applies at that same rate to taxable items brought in from an out-of-state seller that didn't charge Michigan sales tax.
3. Local taxes
Some Michigan cities levy their own income tax on top of the state rate. An LLC with employees or a location there withholds it from paychecks. Detroit is the largest example.
Its rate is 2.4% for residents and 1.2% for nonresidents who work in the city [7]. Check with the specific city where your LLC operates.
Michigan pass-through entity tax (FTE) election
Michigan lets multi-member LLCs and LLCs taxed as S-corps elect to pay state income tax at the entity level instead of passing it through to the members.
Federal law caps the state and local tax deduction at $10,000 per individual return. Tax paid at the entity level isn't subject to that cap. The flow-through entity tax rate matches the individual income tax rate for that tax year [8].
You make the election with an electronic payment through Michigan Treasury Online (MTO), due by the last day of the ninth month after the entity's tax year ends, September 30 for calendar-year filers [9]. The election then locks in for three tax years.
The entity then files Form 5772, the Flow-Through Entity Tax Annual Return, due March 31 for calendar-year filers. Both the election payment and the annual return go through MTO only.
A CPA can model whether the entity-level election actually saves your specific ownership group money before you lock it in for the year.
What is deductible for a Michigan LLC
An LLC taxed as a C-corp under Michigan's CIT can claim the small business alternative credit. It swaps the standard CIT rate for 1.8% of adjusted business income if the LLC qualifies. It's Michigan's main state-specific break for LLCs that elected corporate treatment.
Members of an LLC that elects the flow-through entity tax also get a credit. It lands on their own Michigan return, for their share of the tax the entity already paid. That way, the income isn't taxed twice at the state level.
Pass-through LLC owners may also qualify for the federal Qualified Business Income deduction on their federal return. It's a federal benefit under Section 199A, and it has no effect on the amount Michigan itself collects.
FAQs
Do I Need To File A Michigan Return If My LLC Is Taxed As A Partnership?
Yes, you need to file a Michigan return if your LLC is taxed as a partnership. Every member who receives income owes the state their own return, since the partnership itself doesn't file one for the group.
Do Out-Of-State LLCs Registered In Michigan Owe Michigan Taxes?
Yes, out-of-state LLCs registered in Michigan owe Michigan taxes on income earned in the state. They apportion multistate income the same way domestic LLCs with Michigan and out-of-state activity do.
References:
- https://www.michigan.gov/treasury/reference/taxpayer-notices/2026/04/15/425-income-tax-rate-for-individuals-and-fiduciaries-in-2026-tax-year
- https://www.michigan.gov/taxes/business-taxes/cit
- https://www.irs.gov/businesses/small-businesses-self-employed/self-employment-tax-social-security-and-medicare-taxes
- https://www.michigan.gov/taxes/-/media/Project/Websites/taxes/Forms/IIT/TY2025/MI-1040ES-(2026).pdf
- https://www.michigan.gov/leo/bureaus-agencies/uia/employers/frequently-asked-questions-for-employers/for-employers/tax-rates-and-liability
- https://www.michigan.gov/taxes/-/media/Project/Websites/taxes/Forms/SUW/TY2026/5099.pdf
- https://www.michigan.gov/taxes/-/media/Project/Websites/taxes/Forms/City-Withholding/TY2025/5469_ty2025.pdf
- https://www.michigan.gov/treasury/reference/the-implementation-of-the-michigan-flow-through-entity-tax/i-overview-of-the-flow-through-entity-tax/c-how-is-tax-on-an-electing-flow-through-entity-calculated
- https://www.michigan.gov/taxes/-/media/Project/Websites/taxes/Forms/MTO/TY2025/5772_ty2025-instructions.pdf
