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Merged
PavelMakarchuk merged 1 commit into from
Aug 18, 2026
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Pin Michigan 2026 income tax rate #9164

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1 change: 1 addition & 0 deletions changelog.d/mi-2026-income-tax-rate.fixed.md
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@@ -0,0 +1 @@
Pin Michigan's 2026 individual income tax rate to the official 4.25 percent annual determination.
4 changes: 4 additions & 0 deletions policyengine_us/parameters/gov/states/mi/tax/income/rate.yaml
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Expand Up @@ -6,6 +6,8 @@ values:
2024-01-01: 0.0425
# 2025 rate remains at 4.25% per Michigan Treasury notice
2025-01-01: 0.0425
# 2026 rate remains at 4.25% per April 15, 2026 Michigan Treasury notice
2026-01-01: 0.0425
metadata:
period: year
unit: /1
Expand All @@ -22,3 +24,5 @@ metadata:
href: https://www.michigan.gov/taxes/questions/tax-faqs/income-tax-rate-change/income-tax-rate-change-overview
- title: 2025 Tax Year Income Tax Rate for Individuals and Fiduciaries
href: https://www.michigan.gov/treasury/reference/taxpayer-notices/2025-tax-year-income-tax-rate-for-individuals-and-fiduciaries
- title: 4.25% Income Tax Rate for Individuals and Fiduciaries in 2026 Tax Year
href: https://www.michigan.gov/treasury/reference/taxpayer-notices/2026/04/15/425-income-tax-rate-for-individuals-and-fiduciaries-in-2026-tax-year
8 changes: 8 additions & 0 deletions ...policy/baseline/gov/states/mi/tax/income/mi_income_tax_before_non_refundable_credits.yaml
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Expand Up @@ -14,3 +14,11 @@
state_code: MI
output:
mi_income_tax_before_non_refundable_credits: 0

- name: 2026 Michigan income tax uses the official 4.25 percent rate
period: 2026
input:
mi_taxable_income: 20_000
state_code: MI
output:
mi_income_tax_before_non_refundable_credits: 850
10 changes: 10 additions & 0 deletions policyengine_us/tests/test_parameter_files.py
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Expand Up @@ -8,6 +8,7 @@
SOI_LONG_TERM_CAPITAL_GAINS_PATH = (
PARAMETERS_DIR / "calibration/gov/irs/soi/long_term_capital_gains.yaml"
)
MI_INCOME_TAX_RATE_PATH = PARAMETERS_DIR / "gov/states/mi/tax/income/rate.yaml"
SOI_LONG_TERM_CAPITAL_GAINS_ANCHORS = {
date(2015, 1, 1): 733_313_255_000,
date(2020, 1, 1): 1_063_500_316_000,
Expand Down Expand Up @@ -147,3 +148,12 @@ def test_soi_long_term_capital_gains_uses_latest_publication_1304_anchor():
assert parameter["metadata"]["reference"][0]["href"].endswith(
"publication-1304-basic-tables-part-1"
)


def test_mi_2026_income_tax_rate_uses_official_annual_determination():
parameter = yaml.safe_load(MI_INCOME_TAX_RATE_PATH.read_text())

assert parameter["values"][date(2026, 1, 1)] == 0.0425
assert parameter["metadata"]["reference"][-1]["href"].endswith(
"425-income-tax-rate-for-individuals-and-fiduciaries-in-2026-tax-year"
)
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