Does Michigan follow the federal no-tax-on-tips and overtime deductions?
CONFORMS (tax years 2026–2028 only; not 2025)
Michigan's position is split — by deduction, by tax year, or both. Read the per-deduction table and the state's own words below carefully before assuming either deduction applies to your state return. The federal deduction on Schedule 1-A is separate and unaffected.
Verified against the official state source below — last verified October 26, 2026
| Deduction | Michigan position |
|---|---|
| Federal tips deduction (IRC §224) | Conforms 2026–2028 only |
| Federal overtime deduction (IRC §225) | Conforms 2026–2028 only |
What the state itself says
"2025 PA 24 amended the Michigan Income Tax Act to align state tax law with certain provisions of the IRC."
- Official source
- Michigan Department of Treasury, "Notice Regarding New Deductions for Qualified Overtime Compensation and Qualified Tips" (January 6, 2026)
- Tax years covered
- 2026, 2027, 2028 only. The notice states expressly: "These deductions are only available for the 2026, 2027, and 2028 tax years" and "For the 2025 tax year, deductions for qualifying overtime compensation and qualified tips will not be available in Michigan."
Not automatic conformity — Public Act 24 of 2025 (signed Oct. 7, 2025) amended MCL 206.30 to create Michigan deductions equal to the federal §224/§225 deductions claimed on the same year's federal return.
Your federal deduction is separate
Whatever your state does, the federal deductions run on their own rules: check your W-2 codes with the W-2 Code Checker, estimate with the Tips Calculator and Overtime Calculator, and see the glossary for any term. All state positions: the state-by-state index.
State position verified October 26, 2026 from the official source above. State guidance changes; confirm on the source before filing. This page is general information, not tax advice.