Michigan LLC Tax Filing: Forms & Deadlines (2026)

Fact-checked by the LegalGlass editorial team against primary sources · Published Aug 6, 2026 · Last updated Aug 6, 2026

A Michigan LLC is a pass-through by default: it files no entity income tax return, and its members report their share of the profit on the Michigan individual return (MI-1040) at the flat 4.25% rate for 2026. An LLC taxed as a C corporation instead pays the 6% Corporate Income Tax, and Michigan sales tax is a flat 6%.

How a Michigan LLC Is Taxed: The Two Layers

Understanding LLC taxes in Michigan means separating two layers. The first is federal tax, set by the IRS, which treats the LLC as a pass-through by default. The second is state tax, administered by the Michigan Department of Treasury. Michigan does not impose a franchise or gross-receipts tax on LLCs; instead, pass-through profit is taxed to the members under the individual income tax, an LLC taxed as a corporation pays the Corporate Income Tax, and any LLC may make a special entity-level Flow-Through Entity Tax election. On top of income tax, an LLC that sells taxable goods collects sales tax. An LLC is a creature of state law but a tax "chameleon" federally - the same limited liability company can be taxed four different ways depending on its membership and any elections it makes. This guide walks through both layers, the forms, and the deadlines. For the national picture, see business tax and how to file business taxes.

Federal Default Classification

The IRS does not have an "LLC" tax return. Instead, an LLC is assigned a default classification based on how many members it has:

• Single-member LLC - treated as a disregarded entity. The business is ignored for federal income tax; the owner reports profit or loss on Schedule C filed with their Form 1040. See single-member LLC for detail.
• Multi-member LLC - treated as a partnership. The LLC files an informational return, Form 1065, and issues a Schedule K-1 to each member, who reports their share on their personal return.

In both defaults, the profit flows through to the members and is taxed at individual rates - federally and, in Michigan, at the state's flat rate. No income tax is paid at the entity level, which avoids the "double taxation" of a C corporation. Members who are active in the business also pay federal self-employment tax of 15.3% (Social Security and Medicare) on their share of earnings, reported on Schedule SE. Michigan does not levy a separate state self-employment tax.

Electing Corporate or S-Corp Treatment

An LLC can override its default by filing an election with the IRS. It can choose to be taxed as a C corporation by filing Form 8832, or as an S corporation by filing Form 2553. An S-corp election keeps pass-through treatment but lets owner-employees split income between reasonable W-2 wages (subject to payroll tax) and distributions (not subject to self-employment tax), which can lower payroll taxes once profits are high enough. An S-corp LLC files Form 1120-S; a C-corp LLC files Form 1120 federally and becomes subject to Michigan's Corporate Income Tax. Whether the election saves money depends on profit level, payroll costs, and administrative burden - see S-corp vs LLC and LLC vs S-corp tax before electing. Michigan follows the federal classification: an LLC that is an S corporation federally is treated as a flow-through entity for Michigan income tax, not as a CIT taxpayer.

Michigan Individual Income Tax on Pass-Through Income

For a default (pass-through) Michigan LLC, the state income tax is paid by the members, not the company. Each member reports their distributive share of the LLC's income on the Michigan individual income tax return, Form MI-1040, and pays tax at Michigan's flat rate of 4.25% for the 2026 tax year. The LLC itself files no separate Michigan income tax return under the default rules - Michigan does not require a stand-alone partnership income return unless the entity elects the Flow-Through Entity Tax described below.

Nonresident members owe Michigan tax only on their share of Michigan-source income. A multi-member LLC may file a Michigan composite return on behalf of participating nonresident members, or the members may file individual MI-1040 returns. Members who expect to owe $1,000 or more of Michigan tax generally must make quarterly estimated payments (Form MI-1040ES) on the same April, June, September, and January schedule as the federal estimates.

The Michigan Flow-Through Entity (FTE) Tax

Michigan offers an elective Flow-Through Entity (FTE) Tax that lets an LLC taxed as a partnership or S corporation pay Michigan income tax at the entity level at 4.25% on its business income base. This is a state-level workaround to the federal $10,000 cap on the state-and-local-tax (SALT) deduction: because the tax is paid by the entity, it is deductible on the federal return, and members then claim a refundable credit on their MI-1040 for their share of the tax paid. The election is made through Michigan Treasury Online (MTO) and, once made for a tax year, binds the entity for that year.

An LLC that elects the FTE Tax files the Michigan Flow-Through Entity Tax annual return (Form 5772) and reports each member's share on the related schedule (Form 5774). The FTE Tax is optional - it usually benefits LLCs whose members would otherwise lose part of their SALT deduction - so weigh it with a tax professional. Confirm the current election window and payment due dates on the Treasury's Flow-Through Entity Tax page before relying on the election. This is separate from the annual statement you file with LARA; for that see Michigan annual report.

Corporate Income Tax for LLCs Taxed as Corporations

If your LLC elects to be taxed as a C corporation, it becomes subject to Michigan's Corporate Income Tax (CIT) at a flat 6% rate on its apportioned corporate income tax base. The CIT is filed on Form 4891. A taxpayer is not required to file a CIT return if its apportioned or allocated gross receipts are less than $350,000, or if its CIT liability is $100 or less. Most small LLCs never elect C-corp status and so never touch the CIT, but the option matters for businesses that reinvest profits or need corporate-level treatment. An LLC that is an S corporation federally is not a CIT taxpayer - its income flows through to the members instead. Compare the structures at LLC vs corporation and S-corp vs C-corp.

Michigan Sales, Use, and Withholding Tax

If your LLC sells taxable goods or certain services in Michigan, you must register for sales tax before making sales. Michigan's sales tax is a flat 6% statewide, and - unlike Texas or many other states - there is no local sales tax, so the rate is 6% everywhere in the state. A companion 6% use tax applies to taxable purchases on which sales tax was not collected. If the LLC has employees, it also registers for withholding tax. You register for all three on Form 518 (Registration for Michigan Taxes) or through Michigan Treasury Online at no charge, which is the same registration you complete when you form an LLC in Michigan.

Sales, use, and withholding (SUW) taxes are reported together. The Treasury assigns a monthly, quarterly, or annual filing frequency based on your tax liability, and an annual reconciliation return (Form 5081) is due February 28 each year. Sales tax is separate from income tax - an LLC can owe SUW tax even in a year it has no taxable profit. See business license in Michigan for how sales-tax registration fits with other permits.

Federal and Michigan Filing Deadlines

Return deadlines depend on the LLC's classification. The table below summarizes the main federal and Michigan income-tax filings for a calendar-year LLC. Members who owe $1,000 or more generally also make quarterly estimated payments.

See when business taxes are due and Form 1120 vs 1120-S vs 1065 for how these returns differ, and note that Michigan's Corporate Income Tax return is due the last day of the fourth month after the tax year (April 30 for calendar-year filers).

EIN and Michigan Tax Registration Steps

Before filing anything, most Michigan LLCs need a federal Employer Identification Number (EIN), which the IRS issues for free. An EIN is required if the LLC has more than one member, has employees, or elects corporate/S-corp treatment; even a single-member LLC usually gets one to open a business bank account. With the EIN in hand, register for Michigan taxes on Form 518 or through Michigan Treasury Online - this creates your sales, use, and withholding accounts and, where relevant, your CIT or FTE account. See how to get an EIN for an LLC to complete this step, and Michigan LLC cost for the state filing fees that accompany formation.

Frequently Asked Questions

Does a Michigan LLC pay state income tax?

By default, no - the LLC is a pass-through, and its members pay Michigan's flat 4.25% individual income tax on their share via the MI-1040. An LLC taxed as a C corporation pays the 6% Corporate Income Tax instead, and any LLC can elect the entity-level Flow-Through Entity Tax at 4.25%.

How is a Michigan LLC taxed federally?

By default the IRS treats a single-member LLC as a disregarded entity (Schedule C) and a multi-member LLC as a partnership (Form 1065). The LLC can instead elect C-corp (Form 8832) or S-corp (Form 2553) treatment.

What is the Michigan Flow-Through Entity Tax?

It is an elective, entity-level tax at 4.25% on an LLC's business income, designed as a workaround to the federal $10,000 SALT deduction cap. Members claim a refundable credit for their share. You elect it through Michigan Treasury Online and file Form 5772.

Does a Michigan LLC charge sales tax?

Yes, if it sells taxable goods or certain services. Michigan sales tax is a flat 6% statewide with no local add-on. You register free on Form 518 or through Michigan Treasury Online and remit on the schedule the Treasury assigns.

When are Michigan LLC taxes due?

Members file the MI-1040 by April 15. A C-corporation-taxed LLC files the CIT return by April 30 (calendar year). The annual Sales, Use and Withholding return (Form 5081) is due February 28.

Related

• Business tax (cluster hub)
• How to form an LLC in Michigan
• Michigan LLC cost and filing fees
• Michigan annual report (annual statement)
• Michigan resident agent requirements
• S-corp vs LLC and LLC or S-corp?
• Self-employment tax calculator
• How to dissolve an LLC in Michigan

Sources

1. Michigan Department of Treasury - Flow-Through Entity Tax (elective 4.25% entity-level tax; refundable member credit; Forms 5772/5774; MTO election).
2. Michigan Department of Treasury - Corporate Income Tax (6% rate; $350,000 gross-receipts filing threshold; $100 liability threshold; Form 4891).
3. Michigan Department of Treasury - Sales and Use Tax (flat 6% sales and use tax; no local sales tax).
4. Michigan Department of Treasury - Withholding Tax (employer withholding registration and returns).
5. Michigan Department of Treasury - New Business Registration (Form 518; Michigan Treasury Online; SUW accounts).
6. Michigan Department of Treasury - Individual Income Tax (MI-1040; pass-through reporting).
7. Michigan Department of Treasury - 2026 Individual Income Tax Rate (4.25%).
8. Michigan Legislature - MCL 206.51, Individual Income Tax Rate.
9. Michigan Legislature - MCL 206.623, Corporate Income Tax Imposed (6% rate).
10. Michigan Legislature - MCL 205.52, General Sales Tax Act (6% sales tax).
11. IRS - Limited Liability Company (LLC) (default classification).
12. IRS - About Form 1065 (partnership return, March 15 deadline).
13. IRS - About Schedule C (Form 1040) (disregarded-entity reporting).
14. IRS - About Form 2553 (S-corporation election).
15. IRS - About Form 8832 (entity classification election).
16. IRS - Self-Employment Tax (15.3% rate).
17. Cornell LII - 26 U.S.C. § 1361 (S corporation defined).

LegalGlass provides general information for educational purposes and is not a law firm or a substitute for advice from a licensed attorney or tax professional. Laws, rates, and thresholds change; verify current requirements with the Michigan Department of Treasury and the IRS before acting.