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Your First Year in Michigan

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The "Michigan Left" is a real thing! You will often have to drive past your destination, pull a U-turn at a designated median crossing, and come back. It takes about a year to stop hating it.

Your first year is marked by the cycle of the four distinct seasons and your first encounter with the Michigan tax system as a resident.

Taxes: Your First Filing​

When April 15th rolls around, your tax situation will look a bit different than a standard year.

Part-Year Resident Returns​

  • If you moved to Michigan mid-year, you must file a part-year resident return (Schedule NR).
  • You only pay Michigan state tax on the income earned after you established residency here.
  • Don't forget to check if your previous state requires a return for the income earned there.

Homestead Property Tax Credit​

  • Even if you rent, you may be eligible for a tax credit if your rent exceeds a certain percentage of your income.
  • Ensure you keep your lease and proof of rent payments for the entire year.

Property Tax & Home Ownership​

If you purchased a home during your first year, there is one critical form you must not forget.

Principal Residence Exemption (PRE)​

  • The PRE (formerly known as the "Homestead Exemption") exempts your primary home from the 18-mill local school operating tax.
  • Deadlines: You must own and occupy the home by June 1 (to qualify for summer/winter bills) or November 1 (for the winter bill).
  • How to apply: File Form 2368 with your local city or township assessor.

The "Uncapping" Event​

  • In Michigan, property tax increases are capped by inflation. However, when a property is sold, the value "uncaps" the following year.
  • Warning: Your property taxes in your second year will likely be higher than what the previous owner paid. Budget for this "pop" in your escrow.

Principal Residence Exemption (PRE) Savings Calculator​

Principal Residence Exemption (PRE) Savings

Enter the home's market value to see how much the PRE (18-mill) exemption saves you annually.

Enjoy the Seasons​

Michigan is arguably the best state for outdoor variety. To survive the first year, you have to embrace the change.

Summer: The Great Lakes​

  • Visit a Great Lake beach (Lake Michigan for sunsets/dunes, Lake Huron for sunrises).
  • Tip: Buy a "Recreation Passport" when you renew your tabs at the SOS for affordable entry to all State Parks.

Fall: The Color Tour​

  • Hike the forests in October. The "M-119 Tunnel of Trees" is a world-famous drive for autumn colors.
  • Visit a cider mill for fresh apple cider and donuts—a Michigan rite of passage.

Winter: Driving in the Snow​

  • Learn to drive in the snow early. Find an empty parking lot after the first big frost to practice how your car handles skids.
  • Pro-tip: Don't "pump" your brakes if you have ABS; apply steady pressure. Increase your following distance to at least 3x the normal length.
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Relocation and moving expenses are no longer tax-deductible for most people on federal returns (since 2018), but keep your receipts anyway in case your specific employment contract or future tax law changes allow for deductions.

One-Year Milestones​

  • Voter Registration: If you haven't already, your one-year mark is a great time to ensure you are registered for local school board and municipal elections.
  • Vehicle Tabs: Your license plate "tabs" expire every year on your birthday. You can renew these online via the SOS website.

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