Compare taxes and see how much you save moving from Indiana to Michigan
Indiana’s 3.15% flat state rate is lower than Michigan’s 4.05%, saving $900/year on $100,000 income at the state level. However, Indiana’s county income taxes (averaging 1.5%, ranging up to 3.38%) can substantially narrow or eliminate the gap for many Indiana residents. Detroit residents face Michigan’s state rate plus a 2.4% city income tax — the highest combined burden in either state. Indiana also caps residential property tax at 1% of assessed value, giving homeowners significant protection that Michigan’s 1.32% average rate does not provide.
Flat Rate
3.15% flat state rate (reducing to 2.9% by 2027) plus county income taxes
Flat Rate
4.05% flat state rate; Detroit residents pay additional 2.4% city income tax
At $100,000 income:
That is $75/month back in your pocket!
| Income | IN Tax | MI Tax | Savings | 10-Year |
|---|---|---|---|---|
| $50,000 | $1,575 | $2,025 | $450 | $4,500 |
| $75,000 | $2,363 | $3,038 | $675 | $6,750 |
| $100,000 | $3,150 | $4,050 | $900 | $9,000 |
| $150,000 | $4,725 | $6,075 | $1,350 | $13,500 |
| $250,000 | $7,875 | $10,125 | $2,250 | $22,500 |
| $500,000 | $15,750 | $20,250 | $4,500 | $45,000 |
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Talk to a CPA About Your State Move →At the state rate level, yes — Indiana’s 3.15% vs Michigan’s 4.05% saves $900/year on $100,000 income. However, Indiana also charges county income taxes (averaging ~1.5%), which most Michigan residents outside Detroit do not face. An Indiana resident in Marion County (1.02%) pays about $1,020 in county tax, bringing their total to $4,170 vs Michigan’s $4,050. The true winner depends on which Indiana county you live in. In low-county-tax areas, Indiana clearly wins; in high-county-tax areas, Michigan may be cheaper.
Detroit residents pay a 2.4% city income tax on top of Michigan’s 4.05% state rate, for a combined 6.45% on earned income. On $100,000, that’s $6,450 in state+city income tax — compared to $3,150 in Indiana. Detroit residents would save $3,300/year by moving to Indiana (before county taxes). Non-Detroit Michigan residents pay only the 4.05% state rate, which is much more competitive.
Indiana’s property tax caps are enshrined in its state constitution. Residential properties are capped at 1% of gross assessed value, rental properties at 2%, and commercial/agricultural at 3%. This means on a $400,000 home, Indiana homeowners pay a maximum of $4,000/year in property taxes, regardless of the local rate. Michigan’s average property tax of 1.32% on a $400k home costs $5,280/year — $1,280 more. Indiana’s cap provides significant and predictable protection for homeowners.
Yes. Indiana passed legislation to reduce its flat state income tax rate in steps. The rate was 3.23% until 2023, cut to 3.15% in 2024, and is scheduled to reach 2.9% by 2027 under current law. This phased reduction makes Indiana’s income tax trajectory one of the most favourable in the Midwest. By 2027, Indiana vs Michigan will be a 2.9% vs 4.05% comparison — a $1,150/year difference on $100,000 income at the state level.