Michigan Compiled Laws

Mich. Comp. Laws § 206.255 (2026)

Credit for tax imposed by another state, District of Columbia, or Canadian province; allowance of Canadian provincial credit; maximum credit.

✓ current as of July 2026

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INCOME TAX ACT OF 1967

Act 281 of 1967

206.255 Credit for tax imposed by another state, District of Columbia, or Canadian province; allowance of Canadian provincial credit; maximum credit.

Sec. 255.

(1) A resident individual or resident estate or trust is allowed a credit against the tax due under this part for the amount of an income tax imposed on the resident individual or resident estate or trust for the tax year by another state of the United States, a political subdivision of another state of the United States, the District of Columbia, or a Canadian province, on income derived from sources outside this state that is also subject to tax under this part or the amount determined under subsection (3), whichever is less. For purposes of the Canadian provincial credit, the credit is allowed for only that portion of the provincial tax not claimed as a credit for federal income tax purposes. It is presumed that the Canadian federal income tax is claimed first. The provincial tax claimed as a carryover deduction as provided in the internal revenue code is not allowed as a credit under this section.

(2) The Canadian provincial credit shall be allowed for the 1978 tax year and for each tax year after 1978.

(3) The credit under this section shall not exceed an amount determined by dividing income that is subject to taxation both in this state and in another jurisdiction by taxable income and then multiplying that result by the taxpayer's tax liability before any credits are deducted.

History: 1967, Act 281, Eff. Oct. 1, 1967 ;-- Am. 1969, Act 332, Imd. Eff. Nov. 4, 1969 ;-- Am. 1978, Act 589, Imd. Eff. Jan. 4, 1979 ;-- Am. 1979, Act 30, Imd. Eff. June 14, 1979 ;-- Am. 1982, Act 515, Imd. Eff. Dec. 31, 1982 ;-- Am. 1987, Act 254, Imd. Eff. Dec. 28, 1987 ;-- Am. 1996, Act 484, Eff. Jan. 1, 1997 ;-- Am. 2011, Act 38, Eff. Jan. 1, 2012

Compiler's Notes:

Section 2 of Act 515 of 1982 provides: “(1) Section 255 of this amendatory act shall be effective for the 1979 tax year and each tax year thereafter.

(2) Section 301 of this amendatory act shall take effect for tax years beginning on or after January 1, 1983.

(3) Section 520 of this amendatory act shall take effect for tax years beginning on or after January 1, 1981.”

Notes of Decisions

Cited in 7 cases, 1977–2013 · leading case: Chocola v. Dep't of Treasury, 369 N.W.2d 843 (Mich. 1985).

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Chocola v. Dep't of Treasury, 369 N.W.2d 843 (Mich. 1985). · cites it 5× “Plaintiffs challenged the department’s action in the State Board of Tax Appeals, arguing in the alternative for a tax credit under MCL 206.255; MSA 7.557(1255) for taxes paid to Indiana on the same income.”

Ludka v. Dep't of Treasury, 399 N.W.2d 490 (Mich. Ct. App. 1986). · cites it 3× “The issue presented in this case is whether plaintiffs are entitled to a credit for income taxes paid to Belgium under § 255 of the Income Tax Act, MCL 206.255; MSA 7.557 (1255). Plaintiffs are United States citizens and Michigan residents.”

Tad Malpass v. Dep't of Treasury, 833 N.W.2d 272 (Mich. 2013). “115] and subject to [MCL 206.255], is allocated to this state.”

Shulevitz v. Dep't of Treasury, 261 N.W.2d 31 (Mich. Ct. App. 1977). · cites it 3× “The Board held that the claimed tax credit is not authorized by the Michigan Income Tax Act of 1967, MCLA 206.255; MSA 7.557(1255), and issued an order directing plaintiffs to pay the assessed deficiency.”

Malpass v. Dep't of Treasury, 295 Mich. App. 263 (Mich. Ct. App. 2011). · cites it 3× “115] and subject to [MCL 206.255], is allocated to this state.”

Chocola v. Dep't of Treasury, 348 N.W.2d 290 (Mich. Ct. App. 1984). “VII Finally, we agree with the board that petitioners are entitled to a credit, pursuant to MCL 206.255; MSA 7.557(1255), for the payment of Indiana tax on income that is finally subjected to tax in Michigan.”

Est. of Thomas M Wheeler v. Dep't of Treasury (Mich. 2013). “22 However, if the income is derived from business activity taxable both within and without this state, the ITA requires an individual taxpayer to “allocate and apportion his net income . . . .”23 The ITA further states that, “[f]or a resident individual, .”

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