Michigan · Historic Rehabilitation Tax Credit
Historic Rehabilitation Tax Credit in Michigan (2026)
Claim a 20% tax credit on qualified rehabilitation expenses for certified historic structures, taken ratably over 5 years. Michigan has a flat 4.25% income tax, so a Michigan filer's combined marginal rate on the next dollar at $63,498 of income is about 16.25% (12% federal + 4.25% MI).
2026 savings example for Michigan
Planning estimate for a single filer earning $63,498 (Michigan median household income in LevyIO's state dataset) who claims a $5,000 credit. Federal tax uses the 2026 IRS brackets after the $16,100 standard deduction; MI tax uses the state brackets in LevyIO's dataset and assumes the state follows the federal treatment.
Estimated total savings
$5,000
Federal savings
$5,000
$5,440 → $440 · 12% bracket
MI state savings
$0
Federal credit only; check for a state credit
Combined marginal rate
16.25%
Credits do not depend on the bracket
Federal × Michigan marginal rates (2026, single)
Gross-income ranges include the federal standard deduction. The MI column is the state marginal rate at the midpoint of each range. A credit saves its face value regardless of bracket.
| Federal bracket | Gross income (single) | MI marginal | Combined | Per $1,000 |
|---|---|---|---|---|
| 10% | $16,100 - $28,500 | 4.25% | 14.25% | $1,000 |
| 12% | $28,500 - $66,500 | 4.25% | 16.25% | $1,000 |
| 22% | $66,500 - $121,800 | 4.25% | 26.25% | $1,000 |
| 24% | $121,800 - $217,875 | 4.25% | 28.25% | $1,000 |
| 32% | $217,875 - $272,325 | 4.25% | 36.25% | $1,000 |
| 35% | $272,325 - $656,700 | 4.25% | 39.25% | $1,000 |
| 37% | Over $656,700 | 4.25% | 41.25% | $1,000 |
Eligibility & forms
Owners of certified historic structures who undertake substantial rehabilitation
- 20% credit for certified historic structures
- Must be a substantial rehabilitation (exceed adjusted basis)
- Must follow Secretary of Interior's Standards
Federal forms: Form 3468, NPS Form 10-168
Michigan filing notes
Check if your city imposes additional income tax. Michigan offers homestead property tax credit. Pension income may qualify for subtraction. EITC and city-tax withholding should be verified from current Treasury forms.
Common mistakes: Not getting Part 1 certification before starting work; Failing to meet the substantial rehabilitation test; Not spreading credit over 5 years as required.
Frequently asked questions
How much can the Historic Rehabilitation Tax Credit save a Michigan taxpayer in 2026?
Credits reduce tax dollar-for-dollar. In LevyIO's example, a single filer with $63,498 of income (the Michigan median household income in our state dataset) and a $5,000 credit would cut 2026 federal tax from $5,440 to $440, a $5,000 saving. Whether Michigan offers a matching state credit depends on the MI return, so the estimate counts federal savings only.
What is the Michigan income tax rate for 2026?
Michigan has a flat 4.25% income tax. The MI standard deduction in LevyIO's dataset is $0 single / $0 married. Flat 4.25%. Some cities add income tax. 2026 personal exemption $5,900 per taxpayer. No broad standard deduction.
Who qualifies for the Historic Rehabilitation Tax Credit in Michigan?
Owners of certified historic structures who undertake substantial rehabilitation. The federal rules are the same in every state; the requirements are: 20% credit for certified historic structures; Must be a substantial rehabilitation (exceed adjusted basis); Must follow Secretary of Interior's Standards. Michigan filers should confirm on the MI return whether the state follows the federal treatment.
Which forms do I file to claim the Historic Rehabilitation Tax Credit?
Federal: Form 3468, NPS Form 10-168. Michigan: check the Michigan Department of Treasury instructions for the matching state schedule. Common mistakes: Not getting Part 1 certification before starting work; Failing to meet the substantial rehabilitation test; Not spreading credit over 5 years as required.
Historic Rehabilitation Tax Credit in other states
Sources
Reviewed 2026-09-17. Estimates are educational planning figures computed from the IRS 2026 inflation adjustments and LevyIO's state bracket dataset; they are not tax advice.