Michigan Capital Gains Tax (2026)
Michigan taxes capital gains as ordinary income at a flat 4.25% rate. Run your own numbers with the free capital gains tax calculator, which estimates federal, NIIT, and Michigan tax together.
In short: federal long-term rates of 0%, 15%, or 20% apply everywhere. Michigan adds state tax on top, at up to 4.25%.
How Michigan treats capital gains
Michigan taxes capital gains as ordinary income at a flat 4.25% rate.
Parts of Michigan also levy local income taxes that are not included in these estimates.
A worked example
Say you are a single filer in Michigan with $60,000 of taxable income who sells stock held over a year for a $25,000 long-term gain. Federal tax on the gain is $3,750 (all of it lands in the 15% bracket at this income; no NIIT applies below $200,000 MAGI). Michigan adds an estimated $1,062, for a combined $4,812, an effective 19.2% on the gain. These figures use the same math as the calculator, 2026 federal brackets per IRS Rev. Proc. 2025-32, and state figures from the Tax Foundation's State Individual Income Tax Rates and Brackets, 2026.
Frequently asked questions
Does Michigan tax capital gains?
Yes. Michigan taxes capital gains as ordinary income. Michigan taxes capital gains as ordinary income at a flat 4.25% rate.
What will I pay on a long-term gain in Michigan?
Combined, our worked example ($25,000 long-term gain on $60,000 of income, single) comes to $4,812: $3,750 federal plus $1,062 Michigan tax, an effective 19.2%.
Do I still owe federal capital gains tax in Michigan?
Yes. Federal capital gains tax (0%, 15%, or 20% long-term, ordinary rates short-term, plus the 3.8% NIIT for high earners) applies no matter your state. The free calculator estimates federal, NIIT, and Michigan tax together.
More
- Every state's capital gains treatment
- Capital gains tax explained: short-term vs long-term
- Neighbors alphabetically: Massachusetts · Minnesota
This page is general information, not tax, legal, or financial advice. Rates and rules can change and depend on your situation. Confirm details with a tax professional, the IRS, or your state's revenue department.
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