Updated July 25, 2026. Quick answer (2026): If you are weighing a move out of Michigan in retirement, the entire case for leaving Michigan is income tax — a top rate of 4.25% on withdrawals. Michigan levies no estate tax and no inheritance tax, so there is no ‘death tax’ to escape. Four taxes change when you move — income tax on withdrawals, state estate tax, state inheritance tax, and what probate costs your heirs. This page prices all four for Michigan, then links a worked comparison for each destination.
What Michigan actually charges a retiree
| Tax | Michigan position, 2026 |
|---|---|
| State income tax | flat 4.25% |
| Social Security | not taxed (fully deducted) |
| Pension / 401(k) / IRA | TY2026 completes the 4-year phase-in under PA 4 of 2023 (HB 4001): ALL taxpayers regardless of birth year may deduct retirement and pension income (pensions, 401(k), IRA) up to the Tier-1 cap — approximately $67,610 single / $135,220 joint for 2026 (indexed annually; |
| Estate tax | none |
| Inheritance tax | none |
| Probate fee model | reasonable-fee |
| Probate filing fee | $175 to commence probate proceedings, plus the value-based inventory fee under MCL 600.871 (e.g., $68.75 + 0.5% of the amount over $10,000 for estates $10k-$25k; continues scaling with estate value) — official Michigan Courts fee tables |
| Small-estate limit | $53,000 for deaths in 2026 (official Michigan Treasury annual adjustment notice) — small estate petition/assignment under MCL 700.3982 (base raised $15,000 → $50,000 by 2024 PA, indexed per MCL 700.1210); transfer-by-affidavit (MCL 700.3983) uses the same indexed figure; up to $264,000 of real-estate debt deductible in the 2026 calculation. |
The mistake Michigan retirees make
Because Michigan has a high headline income-tax rate, people assume it also has a punishing estate tax. It does not — Michigan levies neither an estate tax nor an inheritance tax. So the saving from moving is real but single-sourced: it is income tax on withdrawals and nothing else. If you are moving to a state that does levy a death tax, you can end up worse off overall.
Where Michigan retirees go, and what each move is worth
Destinations below are drawn from documented retiree migration. Each links a worked, statute-cited comparison of all four taxes for that specific pair.
- Michigan to Florida — stop paying income tax on withdrawals
- Michigan to North Carolina — top rate falls; compare the death taxes too
- Michigan to South Carolina — top rate falls; compare the death taxes too
A new destination: Mississippi
Mississippi fully exempts all qualified retirement income — public and private pensions, 401(k)/403(b) and IRA distributions — levies neither an estate nor an inheritance tax, and runs a flat 4% for 2026 falling to 3.75% in 2027. Michigan to Mississippi prices all four taxes that change on the move, statute-cited for 2026.
Getting the sequence right
Leaving Michigan cleanly is a sequencing problem as much as a tax one: domicile tests, what happens to property you keep behind, and the order of conversions and sales. See finding an advisor for a cross-state move for what to look for and the five questions to ask first.
Will Michigan still tax me after I move away?
Not on your retirement withdrawals, once you genuinely change domicile — but that is a harder test than a change of address, and what you leave behind stays in reach.
- Domicile is a test, not an address. Michigan can audit a departing resident. Days present, licence, registrations, where your advisers are and where you keep what you value all count.
- Property left behind stays reachable. Keeping a home in Michigan can keep part of your estate inside Michigan rules.
- Sequence any Roth conversion. It is taxed where you are domiciled in the year you convert — see how all 51 jurisdictions tax Roth conversions.
Full Michigan detail: Michigan retirement taxes. All corridors: retirement tax relocation hub.
Getting the order right
Move timing, conversion sequencing and estate exposure interact, and the order changes the total. Know what advice should cost before you buy it — see our advisor cost guide.
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Cite or share this guide
Suggested citation: Clear Money Guide, “Leaving Michigan in Retirement: the 2026 Tax Position,” statute-cited; clearmoneyguide.com/leaving-michigan-retirement-taxes/. Free to cite with attribution. Download the full dataset as CSV, or contact contact@clearmoneyguide.com for custom cuts.
Primary sources
- MCL 206.30
- PA 4 of 2023 (HB 4001)
- Michigan Treasury: Retirement and Pension Benefits guidance
- RAB 2026-1
- MCL 700.3719
- MCL 700.3982
- MCL 700.1210
- MCL 600.871