Michigan Earned Income Tax Credit: The 30% Credit Explained

What the Michigan EITC is

The Michigan Earned Income Tax Credit for Working Families is a state tax credit equal to 30% of your federal Earned Income Tax Credit. If you qualify for the federal EITC, you automatically qualify for the Michigan credit; there is no separate state application. The credit is fully refundable: if 30% of your federal credit is more than your Michigan income tax for the year, the Michigan Department of Treasury sends you the difference as a refund. For the 2025 filing season, about 665,000 Michigan households received the state credit, averaging roughly $890 on top of the federal credit.

The 30% rate is recent, and worth understanding because it still affects old returns. Michigan created the credit in 2006 (Public Act 372) at 20% of the federal amount, cut it to 6% in the 2011 tax overhaul (Public Act 38), then restored and expanded it to 30% in 2023 under Public Act 4, the Lowering MI Costs Plan. That 2023 law applied retroactively to tax year 2022: filers who had received the old 6% credit on their 2022 returns were mailed supplemental checks for the remaining 24% automatically, starting when the law took effect in February 2024, with no amended return required.

The mechanics are deliberately simple: figure your federal credit first, then take 30% of it on your Michigan return. Everything that decides how much you get, from income limits to qualifying children, is decided at the federal level, which is where the next section starts.

Who qualifies: the federal rules control

Because the Michigan credit is a straight percentage of the federal one, eligibility lives entirely in Internal Revenue Code section 32. If the IRS disallows your federal EITC, the Michigan credit disappears with it. The federal rules come down to four gates:

One rule causes more problems than all the others combined: only one taxpayer can claim a given child. When a child qualifies for more than one person, common in shared-custody and multi-generational households, the IRS tiebreaker rules decide: a parent beats a non-parent; between separated parents, the one the child lived with longer wins; if time is equal, the parent with the higher adjusted gross income wins; and a non-parent can claim the child over a parent only with a higher AGI than any eligible parent. Two family members claiming the same child is the fastest route to a frozen refund and a correspondence audit, on both the federal and Michigan credits.

Credit amounts for 2025 and 2026

The federal credit phases in as you earn, plateaus at a maximum, then phases out as income rises; the credit is zero once adjusted gross income reaches the limit for your filing status and family size. The IRS adjusts the figures annually for inflation, and Michigan's 30% scales with them automatically. These are the amounts for returns filed in early 2026 (tax year 2025, per Rev. Proc. 2024-40):

For tax year 2026 (returns filed in early 2027, per Rev. Proc. 2025-32):

If you are filing a late or amended 2024 return, that year's federal maximums were $632 (no children), $4,213 (one), $6,960 (two), and $7,830 (three or more), which makes the Michigan maximums $190, $1,264, $2,088, and $2,349, with an investment income limit of $11,600.

Two things stand out in the tables. The credit for workers without children is small and cuts off at a low income. And for families, the combined credit is substantial: a Michigan family at the 2025 maximum with three children receives $8,046 federal plus $2,414 state, over $10,400 in refundable credits before withholding is even counted.

How to claim it on the MI-1040

The claim itself is mechanical, but every step has to happen or the credit does not:

• File a federal return and claim the federal EITC. If you claim qualifying children, attach Schedule EIC with each child’s name, Social Security number, year of birth, and months lived with you. A missing or mismatched SSN kills the federal claim, and the Michigan claim with it.
• File a Michigan MI-1040 even if you owe nothing and are otherwise below the filing threshold (the Michigan personal exemption is $5,800 for 2025). No return, no credit: Treasury does not pay the EITC automatically.
• Enter your federal EITC amount on line 27a of the MI-1040, multiply it by 30%, and enter the result on line 27b. It sits in the refundable credits section, so it pays out even with zero tax due.

The IRS estimates that roughly one in five eligible workers never claims the EITC, usually because their income is low enough that they skip filing altogether. If cost is the barrier, you likely qualify for free preparation: our guide to filing taxes for free covers IRS Free File and the VITA volunteer program, both of which prepare the federal and Michigan returns together at no charge.

Part-year residents and nonresidents

This is where most real-world mistakes happen. If you lived in Michigan for only part of the year, or lived elsewhere and earned Michigan income, you do not simply take 30% of your federal credit. The credit must be prorated based on how much of your income is Michigan income.

One more subtlety: you do not need positive Michigan taxable income to receive the credit as a resident, but a nonresident needs some Michigan-source income for a Michigan claim to exist at all. If your year involved a move between states, self-employment across state lines, or a spouse in another state, this proration is exactly the kind of thing worth having checked before filing.

Missed a year? Amended returns and the four-year window

If you were eligible in a past year and did not claim the credit, or claimed it incorrectly, you can amend. Michigan amended returns are filed on Form MI-1040X, and under MCL 205.27a you have four years from the original due date of the return to claim a refund. A 2022 return originally due April 18, 2023 can be amended for a refund through April 18, 2027; after the window closes, the money is forfeited.

Note the distinction with the 2022 retroactive checks described earlier: those went out automatically to people who had already claimed the credit at 6%, and Treasury specifically instructed taxpayers not to file amended returns for that adjustment. Amending is for people who never claimed the credit, or whose facts were wrong, not for the rate change itself.

Refund offsets and audit triggers

Two realities are worth knowing before you count on the refund arriving in full:

• The refund is not shielded from debts. State law (MCL 600.4061a) requires Treasury to honor garnishment writs against state tax refunds, and the federal Treasury Offset Program intercepts refunds too. Past-due child support, defaulted student loans, unpaid state tax, and unemployment-benefit overpayments all come out before you are paid. Whatever remains after the offset is sent to you with a notice of adjustment.
• EITC claims are screened heavily. Federal reviews have long estimated that roughly a quarter of EITC payments are improper, mostly from qualifying-child and tiebreaker errors rather than intentional fraud, and both the IRS and Michigan Treasury run automated screening on claims before refunds release. The most common trigger is two people claiming the same child. If your household situation is complicated, getting the qualifying-child analysis right the first time is what keeps the refund from being frozen for months.

If a claim does get questioned, EITC reviews are usually correspondence audits: letters asking for proof of residency, relationship, and income. Respond by the deadline with school, medical, or lease records showing the child lived with you. If an IRS letter has already arrived, our IRS notices hub decodes the specific notice, and the tax controversy guide explains how audits and appeals work from there.

Frequently asked questions