Capital gains: Taxed as ordinary income (city income taxes also apply).
What changed: FY2026 budget (HB4961, signed Oct. 7, 2025) decoupled from several OBBBA business provisions and added state deductions for tips and overtime for 2026-2028.
Invest in MI Kids suspended its petition drive for a 5% income-tax surtax above $500,000, but the group says it plans to try again for 2028, keeping the proposal on affluent Michigan households' radar.
