Does Michigan offer a 529 plan tax deduction?

Yes. Michigan allows a state income tax deduction for contributions to the Michigan Education Savings Program (MESP) or the Michigan Education Trust (MET). The deduction is capped at $5,000 per year for single filers and $10,000 for married couples filing jointly, net of any qualified withdrawals during the year.

How much can I save on Michigan taxes with a 529 plan?

Michigan has a flat income tax rate of 4.25%, so the maximum deduction translates to roughly $212.50 in tax savings for a single filer ($5,000 × 4.25%) and $425 for a joint filer ($10,000 × 4.25%). The actual savings is your deductible contribution multiplied by 4.25%.

Do I have to use a Michigan 529 plan to get the deduction?

Yes. Unlike a handful of tax-parity states, Michigan only allows the deduction for contributions to its own plans — MESP (the direct-sold and advisor-sold savings program) and MET (the prepaid tuition program). Contributions to another state's 529 plan are not deductible on a Michigan return.

Is the deduction reduced by 529 withdrawals?

Yes. Michigan's deduction is calculated net of qualified withdrawals taken during the same tax year. If you contribute and also take distributions, your deductible amount is the net contribution. This calculator applies the cap to whatever net contribution figure you enter.

Can I carry forward contributions above the cap?

No. Michigan does not allow a carryforward of contributions that exceed the annual deduction cap. Amounts above $5,000 single or $10,000 joint in a given year simply do not generate a deduction. This calculator highlights any excess so you can see the non-deductible portion.

Michigan 529 Plan Tax Benefit Calculator 2025 — Up to $10,000 Deduction

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Michigan offers a state income tax deduction for contributions to its own 529 college savings plans — the Michigan Education Savings Program (MESP) and the Michigan Education Trust (MET) prepaid program. The deduction is capped at $5,000 per year for single filers and $10,000 for married couples filing jointly, calculated net of any withdrawals. Because Michigan has a flat 4.25% income tax rate, the tax benefit is straightforward to compute. This calculator caps your contribution, applies the flat rate, and shows your estimated state tax savings.

How it works

The tool first limits your contribution to the deductible cap for your filing status:

Deductible = min(Contribution, Cap) Cap = $5,000 (single) or $10,000 (married filing jointly)

It then applies Michigan’s flat income tax rate to the deductible amount:

Tax savings = Deductible × 4.25%

Any contribution above the cap is shown separately as a non-deductible excess, since Michigan does not allow a carryforward.

Michigan 529 deduction explained

Michigan’s deduction is an “above-the-line” subtraction on your state return for in-state plan contributions only. Contributions to another state’s 529 plan do not qualify. The deduction is figured net of qualified distributions in the same year, so if you both contribute and withdraw, only the net contribution counts.

Because Michigan taxes income at a flat 4.25%, every $1,000 you contribute (up to the cap) saves you $42.50 in state tax.

Worked example

A married couple contributes $12,000 to MESP in 2025:

Deductible = min($12,000, $10,000) = $10,000
Excess above cap = $2,000 (no deduction, no carryforward)
Tax savings = $10,000 × 4.25% = $425

Note: This estimates the state tax benefit only and does not model federal tax-free growth or the Saver’s Credit. Confirm the current cap and rules with the Michigan Department of Treasury and your 529 plan administrator.